EUR/JPY hits 6-month highs and reverses

The euro is falling against the yen on Thursday after hitting earlier the highest level since May. The sharp decline of the EUR/USD pair and the modest correction of the Japanese currency amid a recovery in US bonds, pushed EUR/JPY to the downside. 

EUR/JPY rejected 

The pair gained momentum after yesterday’s Federal Reserve decision, supported by a decline of the yen. It rose above 123.00 and today on European hours broke above 124.00 and peaked at 124.10. It was unable to hold on top of 124.00 and started to pullback. 

The correction from the highs accelerated during the last hours and is now back below the 123.00 handle. It is trading at 122.80, marginally above the level it had before the rate hike announcement in the US. 

If the decline continues and pushes the price below the 122.50 it could increase the bearish potential of the correction: EUR/JPY would be back below a key medium-term resistance. 

Overall, the dominant bullish trend remains intact. Despite falling more than a hundred pips from today’s highs, the pair is still up for the week, headed toward the sixth weekly gain in a row.