EUR/JPY turns sharply lower, tumbles to 113.50 level

Having posted a session high at 114.29, the EUR/JPY cross erased all of its tepid recovery gains and turned sharply lower to a fresh monthly low level. 

Currently trading lower for the third consecutive session, at around mid-113.00s, the cross ran through fresh offers above 114.00 handle as uncertainty over the prospects of further BOJ monetary easing has been the key factor forcing traders to trim their bearish bets against the Japanese currency.

Adding to this, a higher-than-expected drop in Euro-zone current account surplus contributed to fresh selling pressure around the shared currency and dragged the cross to its lowest level since August 26.

Markets this week will remain focused on the upcoming BOJ monetary policy decision on Wednesday, which if disappoints again would turn out to be highly positive for the Japanese Yen and continue dragging the pair lower in the near-term.

Technical levels to watch

A follow through selling pressure below 113.50 level is likely to drag the pair towards 113.15-10 support area, which if broken would trigger a fresh leg of weakness back towards 112.40-30 support area.

On the flip side, any recovery from lower level might now confront immediate resistance near 114.00 round figure mark above which the cross could make a fresh attempt to retest session high resistance near 114.40 area.