Buyers now look to maintain a break above 127.00
Buyers established a near-term bullish bias in the pair during Asian trading today after breaking above the 200-hour MA (blue line) and since then it's been one-way traffic towards the upside. The 127.00 handle and resistance from last week's high helped to stall the upside temporarily but it looks like buyers have found added conviction to break higher in the last hour.
The last hourly candle close was above the 127.00 handle and that is a good base to build off for buyers to extend the upside further.
Looking at the daily chart:
There is some resistance on the daily levels around 127.00-15, though relatively minor. If anything, I'd look for a break above the 127.00 handle on the daily close today to justify that the bullish run still has further room to go.
The next resistance level beyond that will be at 127.61 (38.2 retracement level) followed by the 128.00 handle.
Much like the dollar today, the yen has been relatively weak as bond yields are trading higher on the day while the euro is one of the main beneficiaries from the flows away from the dollar and the yen. With near-term bias favouring further dollar weakness, that supports a further run in the euro for the time being and will give added tailwind for EUR/JPY to extend higher.
But as mentioned above, staying above the 127.00 handle will be key in the session ahead.
