EUR/JPY erases daily gains, holds above 135.00

• EUR/JPY moving between 135.00 and 136.00, consolidating previous gains. 
• Rally limited by USD/JPY slide. 

The EUR/JPY pair erased gains during the American session but is has been able to hold clearly on top of 135.00. A strong yen during the American session weakened the pair. 

The yen lost momentum today amid risk appetite, but it continued to rally versus the US dollar. The decline of USD/JPY, on Asian hours below 111.000 and then under 110.50 (lowest in 4 months) offered support to the yen. 

On Asian hours EUR/JPY found support at 135.00 and rebounded. It peaked at 135.97, the highest level in a week and at the moment of writing it was hovering around 135.40, the same level it closed on Friday. 

Technical outlook 

EUR/JPY moved all day between 135.00 and 136.00, both are the immediate relevant technical levels. The short-term bias continues to point to the upside but price is falling below the20-hour moving average, that could signal some consolidation or correction ahead. That could be seen as normal after a 300-pip rally that started on Wednesday. 

A break above 136.00 would add support for the pair opening the doors for a potential test of the 2018 high located at 136.62. 

On the flip side, a slide back below 134.50 could weaken the euro. Below support levels might be seen at 133.80 and 133.00/05 (last week lows).