Forex: EUR/JPY limited below 127.00 around fresh 32-month highs

EUR/JPY is currently at 126.80, off recent session highs at 126.87, few pips shy below record 32-month highs printed Friday at 126.98, highest since April 15 2010. The cross is higher both on combined Euro strength, strongest currency among majors in last few trading days, and Yen weakness, weakest among all majors, by a big margin.

As FXWW founder Sean Lee puts it: “The EUR strength is being driven by significant flows from players who, one feels, need to buy EUR rather than want to buy it!,” the analyst notes, while: “The ongoing JPY weakness seems to be more of a speculative bubble but one that’s showing no sign of bursting anytime soon.” Sean finds that “the target here is the bottom of a previous consolidation band which comes in near 128.00. A clean break above there would open the way for another 10 big figure move,” he concludes.

Immediate resistance to the upside for EUR/JPY shows at Friday's fresh 32-month highs 126.98, followed by April 15 2010 highs at 127.66, and April 02 2010 highs at 127.92. To the downside, nearest term support lies at Friday’s London session highs 126.30, followed by Friday's NY session lows at 124.80, and Wednesday's highs at 123.88.