EUR/JPY stabilizing mid 122 handle, watching euro downside

Currently, EUR/JPY is trading at 122.43, up 0.61% on the day, having posted a daily high at 122.96 and low at 122.03.

EUR/JPY is gaining ground, although lacking conviction with a recent test of the downside to 122.23 ahead of the opening level at 122.14. The cross is bid on the back of dollar strength and the yen scoring fresh highs through the 116 handle, albeit correcting there and stabilizing below the 115 handle this US session.

US stocks cautious ahead of the Fed, Dow hits fresh all-time high

Focus remains with central banks and risk appetite that is driving demand for stocks and hurting the yen. However, the outlook for the euro is bearish given the ECB's recent announcements, a EMU banking crisis and political uncertainties.

BOJ’s commitment to be tested again - Nomura

"Draghi said it is not tapering, in the context of beginning a gradual slowdown of purchases as an exit strategy rather than an abrupt end. At this point, there are only guesses as to why the ECB reduced its monthly purchases. However, this is a one-off adjustment, unless circumstances change. Moreover, the end date one year from now is soft. The ECB will most likely buy bonds well into 2018" - argued analysts at Brown Brothers Harriman.

EUR/JPY outlook - Commerzbank

"The market remains well supported on dips to 118.45/ 21st July 2016 high and the 200 day ma at 118.49 and while above here it is immediately bid. Intraday dips are indicated to hold circa 120.90/119.50."

EUR/JPY levels

EUR/JPY hints at dip buying

With spot trading at 122.43, we can see next resistance ahead at 122.45 (Monthly High), 122.45 (Weekly High), 122.78 (Daily Classic R3), 122.96 (Daily High) and 123.81 (Weekly Classic R1). Support below can be found at 122.26 (Hourly 20 EMA), 122.25 (Daily Classic R2), 122.02 (Hourly 100 SMA), 121.97 (Daily Classic R1) and 121.73 (Yesterday's High).