• EUR/JPY fades Monday’s advance and breaches 129.00.
• Next on the downside emerges the 127.70 region.

EUR/JPY breaks below the 129.00 support and extends the corrective downside to the 128.90/80 band on turnaround Tuesday.

Despite the knee-jerk, the positive bias in the cross remains unchanged for the time being. Against that, further upside still remains on the cards and the surpass of YTD highs near 130.70 should allow for extra gains with immediate target at the 131.00 hurdle followed by the summer 2018 high at 131.98 (July 17).

However, if the selling impetus gathers extra steam, then the next target of note will be at the 127.70 area, where coincide the immediate support line (off November 19 2020 low) and the 50-day SMA. Below this area, the upside pressure is forecast to lose traction.

In the meantime, while above the 200-day SMA at 125.01 the broader outlook for the cross should remain constructive.

EUR/JPY DAILY CHART