EUR/JPY bounces-off 3-week low, still weak below 113.00 handle

After failing to sustain its recovery move above 113.00 handle, the EUR/JPY cross dropped to a fresh 3-week low near mid-112.00s before retracing few pips to currently trade around 112.70-75 band. 

Yen continues to benefit from last week's BOJ-disappointment, with the pair now trading in negative territory for third consecutive session and building on to its last week BOJ-led sharp slide. 

Meanwhile, the shared currency is feeling the spill-over effect of a sharp slide in the British Pound after BOE surprised markets by announcing additional QE over and above a 25 bps cut to its key interest rates. 

In absence of any major economic releases from Japan and Euro-zone, the pair would take cues from the prevalent risk sentiment in equity markets ahead of Friday's NFP data, which might have diverging effect on both the EUR/USD and the USD/JPY majors and eventually drive the EUR/JPY cross.

Technical levels to watch

On the immediate downside, sustained weakness below session low support near 112.50 region now seems to increase the pair's vulnerability to continue drifting lower in the near-term and head towards testing post-Brexit daily closing lows support near 111.00 round figure mark.

On the flip side, any recovery attempt might now confront immediate resistance near day's peak level around 113.30 region, also coinciding with a short-term descending trend-line support break-point turned resistance. A convincing strength above this immediate resistance seems to assist the pair to extend the recovery further towards 114.00 round figure mark.