EUR/JPY stuck in a trading range below 124.00 handle

The EUR/JPY pair continues to trade relatively flat, holding within a 3-day trading range and hovering around 20-day SMA region.

Baring its intra-day swings in the past couple of days, the pair had traded mostly flat on a daily closing basis to currently trade below 124.00 handle, at 123.75.

Looking at the broader picture, the pair hasn't been able to register any remarkable recovery beyond 124.00 handle from the recent multi-year low level touched in April-May. Subdued movement after a fall to multi-year lows indicates a consolidation phase before the pair decides the next leg of directional move. Till that time, the pair seems to continue with its near-term range-bound trading action.

Technical levels to watch

From current levels, momentum above 124.00 handle towards 124.15-20 area (top end of the trading range) could be looked upon to invite fresh offers. However, a sustained move above this immediate supply zone seems to assist the pair beyond 125.00 psychological mark, towards 125.30-35 horizontal resistance.

On the flip side, weakness below 123.50-40 might drag the pair back below 123.00 handle, to 122.85-80 support area, but is likely to be bought into, which would confirm the pair's near-term trading range. A convincing break below the lower end of the trading range could be the first signs that the pair might resume its downward trajectory, opening room for an immediately fall towards recent lows support near 121.65-60 area.