EUR/JPY intermarket: out of correlation with Wall Street's record highs, buy this dip?

Currently, EUR/JPY is trading at 129.78, down -0.65% on the day, having posted a daily high at 130.85 and low at 129.65.

Wall Street has been the main driver the JPY today. Wall Street's benchmarks were, yet again, making record highs. The S&P 500 has been as high as 2490.83 and the Dow 22,179.40 helped along by solid financial stocks and US data today.

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However, both USD/JPY and EUR/JPY have taken a hit directly in line with a turnaround in US stocks and the dollar, but EUR/JPY bulls have had a hard time in the market today and traded better offered in a nasty squeeze. However, there still could be some upside left in the pairs tracking the indices considering that the Dow is still on track for its 11th straight daily rise, as well as its 10th straight record close. 

Risk appetite could be elevated as we move on through the week, supportive of a bid in EUR/JPY and on the fact that these are turning out to be the Dow's longest such streaks since February. Both the S&P 500 and the Nasdaq are on track for their third straight daily rises. EUR/JPY should also be supported by sentiment surrounding the EZ and ECB turning both bullish on the economy and hawkish on policy. 

EUR/JPY levels

EUR/JPY is bid above the 20-day ma BUT analysts at Commerzbank warn of further consolidation in the cross before much higher levels: 

"We note the 13 count on the daily and the divergence of the daily RSI and suspect it may need to consolidate further ahead of a sustained break higher, we note the TD resistance at 132.565. It remains immediately bid above the 20 day ma currently at 129.965 and the uptrend at 129.06. We target 134.32/61.8% of the move down from 2014. Initial resistance lies 131.75 and we have tightened up our stops," explained the analysts.