EUR/JPY hold in range, with key levels at 127.50 and 128.00.
Dominant trend points to the downside, but some positive sign for the euro emerge.
Gains below 129.00 should be seen as corrective.
The EUR/JPY is rising on Monday, trading in a familiar range. The main trend is to the downside. In the very short-term the consolidation could continue as technical indicators are moving away from oversold levels, still not showing much strength on the upside.
The key level to watch on the downside is 127.50. A daily close below should point to more losses, targeting initially 127.00 and then 126.70; a move in line with the dominant trend. The yen still looks set to drops further. The weekly chart shows the euro has fallen over the last seven weeks, and the RSI is starting to turn to the upside, a positive sign for the common currency.
On the upside a recovery above 128.00 would alleviate the bearish pressure. The up move could extend to 129.00; even a recovery toward the mentioned level should be seen as a correction. A daily close above 130.00 would suggest the euro has probable established an interim bottom.