EUR/JPY jumps to 2-year highs, more gains ahead?

• Spot climbs to highest level since October 2015. 
• JPY weaker on US bond yields. 
• EUR up against most of its main rivals. 

The EUR/JPY pair rose a hundred pips for the second day in-a-row and jumped to the highest level since October 2015. The euro is consolidating on top of the 134.40/50 area that capped the upside during the last three months. A confirmation around current levels could signal more gains ahead. 

At the beginning of the week, EUR/JPY was trading at the lowest in two weeks, near 132.00. Then it started to recover and during the last two days climbed more than 200 pips. Today it peaked at 134.73. 

The up-move of the last two days was a combination of a rally in USD/JPY and also in EUR/USD. The yen weakened amid surging US bond yields after the US Congress passed the tax bill reform. The euro was the best performer among majors on Wednesday. 

More upside? 

EUR/JPY broke above a key technical level. If it consolidates and posts a weekly close above 134.40/50, it would be holding on top of a range between 134.00 and 132.00 that has been in place since mid-September. As long as it holds above 134.40/50, more gains are likely over the next weeks. To the upside, the next strong resistance levels might be seen at 135.65 and 136.60. 

If the euro drops back below 134.00, it could weaken favoring a correction with a potential target at the bottom of the mentioned range.  Before that level, an intermediate support might be seen at 133.10/20. On a wider perspective, a weekly close under 132.00 would signal a bearish continuation.