EUR/JPY remains positive, supported above 130.00

• EUR/JPY reversal from three-week highs at 130.35 contained at 130.00.
• The euro appreciates for the fifth consecutive day against a weaker yen.
• The US/Japan yields' differential is hurting the yen across the board.
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The EUR/JPY’s reversal from three-week highs at 130.35 seen earlier on Tuesday has been short-lived, as the pair found buyers at 130.00 psychological level to defend its near-term upside bias.

The Japanese yen, under pressure amid higher US yields

The solid advance on the US bond yields, with the benchmark 10-year note above 1.5% as the US Federal Reserve signaled the end of the Quantitative Easing program, has been hurting the safe-haven Japanese yen across the board.

In that context, the common currency has taken advantage of a weaker yen, in spite of an energy crisis and the political uncertainty in Germany, which are dampening the Eurozone’s economic growth prospects,  to post a five-day rally. The euro has appreciated about 1.75% over the last five days to breach the mentioned 130.00 level and approach two-month highs at 130.70.

EUR/JPY: Next upside target is 130.70

On the upside, above 130.00 psychological level, the next significative area would be at 130.70 (Sept. 3 and 8 highs and the 20-day SMA) then 131.05 (Jul. 14 high), and 132.30 (Jul. 1 high). On the contrary, a reversal below 130.00 might look for support at 129.75 (Sept. 28 low) and 129.40 (Sept 24 low).

Technical levels to watch