EUR/JPY unable to regain 130.00 after its reversal from 130.50

• EUR/JPY is struggling to return above 130.00 after retreating from 130.45 high.
• The euro fails to take advantage of a weak Japanese yen.
• The pair should breach 130.45 to increase bullish momentum.

The EUR/JPY’s reversal from three-week highs at 130.45 area seen earlier on Wednesday has found support at 129.65 although, so far, the pair seems unable to extend its rebound past the 130.00 level.

The euro remains capped below 130.50 area

The common currency has been rejected at the middle range of 130.00 where it has failed already several times over the last two months. The EUR/JPY peaked at 130.45 this time and is set to post its first daily reversal after having rallied about 1.75% over the last five sessions.

The euro was unable to take advantage of a weak Japanese yen, which is going through a steady decline against the US dollar. Furthermore, the improved risk sentiment, with the main European and US stock indexes posting solid gains, should favour the euro against the safe-haven yen.

EUR/JPY should break above 130.65 to improve its near-term bias

Technical indicators show the pair losing upside momentum in hourly charts. The pair should return above 130.00 and breach 130.45 resistance to improve its near-term bias before testing September's high at 130.75.

On the downside, the pair remains supported above the 100-day SMA, at 129.75 so far. A clear breach of that level would send the pair towards  129.40 (September 24 low) and 128.75 (September 22 high).

Technical levels to watch