EUR/JPY reverses the recent weakness and rebounds to 128.50. Key contention area remains around the 128.00 zone. EUR/JPY reverses five straight days with losses and manages to retake the mid-128.00s on the back of the better mood around the single currency. Further upside faces interim hurdle at the 10-day SMA at 129.29 ahead of a Fibo level near 129.40. Extra gains are expected to challenge the 200-day SMA at 129.57.
Above the latter, the downside pressure is seen mitigating somewhat. While below the 200-day SMA the outlook for the cross should remain bearish for the time being.
EUR/USD puts further distance from Monday’s monthly lows in the 1.1700 neighbourhood. In spite of the current bounce, the very near-term outlook for the pair remains fragile. If the upside gathers extra steam, then the 1.1780/1.1800 band should emerge as the next important barrier. Here coincides the 10-, 55- and 20-day SMAs along with a Fibo level (of the June-August drop).
A breakdown of the September low at 1.1700 should expose the 2021 low at 1.1663 recorded on August 20. In the meantime, the near-term outlook for EUR/USD is seen on the negative side while below the key 200-day SMA, today at 1.1984.