EUR/JPY flirting with lows near 130.00 handle

The EUR/JPY cross struggled to build on previous session's strong gains two-week tops and turned lower during early European session on Wednesday. 

Heading into today's key event risk - FOMC decision, a range bound action around the EUR/USD major has failed to provide any fresh bullish impetus to the cross. This coupled with a modest pickup in the Japanese Yen, led by the BOJ Deputy Governor Nakaso's optimistic comments on the inflation outlook further collaborated to the softer tone surrounding the cross. 

The cross, however, has managed to defend the key 130.00 psychological mark, at least for the time being, and today's price-action could still be categorized as a consolidation phase amid growing optimism over a possible ECB tapering at the September meeting. 

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Even from a technical perspective, the cross has been finding some strong buying interest near an important horizontal support around mid-128.00s and hence, it would be prudent to wait for a decisive break through the mentioned support before confirming that the cross might have topped out in the near-term.

In absence of any major market moving economic releases on Wednesday, the cross remains at the mercy of broader market risk sentiment, which would now be influenced by the FOMC announcement later during the NY trading session. 

Technical levels to watch

Sustained weakness below the 130.00 could extend the fall towards 129.55 horizontal level, below which the cross might turn vulnerable to break below the 129.00 mark and head towards retesting the 128.55-50 important support. 

On the flip side, sustained momentum above mid-130.00s immediate resistance now seems to lift the cross beyond 17-month highs resistance near 130.75-80 region towards reclaiming the 131.00 handle.