• EUR/JPY reverses the recent weakness near the 132.50 level.
• The recovery targets the 2021 highs above 134.00.

EUR/JPY manages to regain some upside traction following two consecutive daily pullbacks on Monday. Following a decent contention in the 132.50 region, the ongoing bullish attempt could extend further, with a lack of relevant hurdles until the YTD highs past 134.00 the figure.

Further north comes in the September/October 2017 highs at 134.40/50. Further gains appear likely as long as the cross remains underpinned by the immediate support line (off the March lows) near 131.70. This area is also reinforced by the proximity of the 161.8% Fibonacci Extension .

In the broader picture, while above the at 133.00 round figure mark the broader outlook for the cross should remain bearish. In the short term we could see come pullback towards the Head and Shoulder neckline breakout region before continuing a further decline in price.