EUR/JPY approaching 124.00 handle resistance

Global risk-on sentiment continues to hurt the safe-haven appeal of the Japanese currency and is thus assisting the EUR/JPY pair to extend its sharp up-move to currently trade just shy of 124.00 handle.

Last week, the pair was seen struggling to move back above 20-day SMA resistance near 123.00 handle. Monday's up-move lifted the pair beyond this immediate resistance, thus forcing some shorts to cover their position that continues to boost the pair further towards 124.00 handle.

Meanwhile, talks of a delay in implementation of a hike in sales tax by the Japanese government also seem to weigh on the JPY. On economic data front, Japanese Retail Sales for the month of April showed a contraction of 0.8% as compared to a year ago. The reading was a tad better than an expected contraction of 1.2% but still pointed to weakening consumer demand.

From technical perspective, the pair still remains stuck within a near-term trading range between 122.00-124.00. However, looking at the broader picture, repeatedly failures to sustain its recovery move beyond 124.00 mark points to a near-term consolidation phase before the pair resumes its prior downward trajectory.

Technical levels to watch

From current levels, the pair seems to make an attempt to conquer 124.00 handle and head towards testing the near-term trading range resistance near 124.15-20 resistance. A clear break-out above 124.00 handle seems to boost the pair beyond 125.00 psychological mark, towards 125.30-35 horizontal resistance.

On the flip side, 20-day SMA near 123.00 handle seems to act as immediate support. A follow through selling pressure below 20-day SMA seems to drag the pair back towards the lower end of the trading range support near 122.20-122.00 handle.