EUR/JPY clings to gains near 17-month tops, beyond 130.00 mark

The EUR/JPY cross extended its recent strong bullish momentum and is now placed at fresh 17-month tops near the 130.30-40 region. 

The latest dovish comments by the BoJ Governor Haruhiko Kuroda on Monday, coupled with the prevalent positive sentiment around global equity markets have been weighing on the Japanese Yen and driving the cross higher. 

   •  BoJ takes (yield curve) control amid global bond sell-off - ING

Meanwhile, the recent ECB “taper tantrum”, further reaffirmed by surging German bunds, continued lending support to the shared currency and further collaborated to the pair's strong up-move to the highest level since Feb. 2016.

   •  ECB preview: Much ado about (almost) nothing - HSBC

With today's up-move, the cross has now rallied around 800-pips from 122.40 level touched during mid-May and has held in positive territory for 16 in the past 19 trading sessions, clearly indicating the underlying strong bullish momentum. 

It, however, remains to be seen if the cross continues building on the strong up-move or witness a near-term profit-taking slide amid highly overbought conditions. 

Technical levels to watch

A strong follow through buying interest beyond mid-130.00s has the potential to continue lifting the cross further towards 130.90-131.00 region en-route Feb. 2016 monthly highs resistance near the 132.00 handle.

On the flip side, any pull-back below the key 130.00 psychological mark now seems to find some fresh buying interest near 129.75-70 region, below which the cross is likely to extend the corrective slide towards 129.00-128.80 horizontal support.