EUR/JPY fall to session low of 122.50

After yesterday's rejection from 123.53 level, on Thursday too, the EUR/JPY pair failed to sustain its move above 123.00 handle and has now dropped to day's through level of 122.50.

The ongoing pull-back in the Euro against the US Dollar has attributed to today's fall in the EUR/JPY pair. However, in absence of any major economic release (ahead of Friday's US payrolls data) the fall could be limited to the day.

From technical perspective, the pair has been oscillating within a short-term ascending trend-channel formation on H4 chart, with trend-channel support close to 122.50 level. However, when considered in conjunction with the pair's sharp fall in the previous week, the ascending trend-channel seems to constitute towards formation of a Flag, a continuation chart pattern. Hence, a decisive break through the trend-channel support might now trigger a fresh leg of downward momentum for the pair.

Technical levels to watch

Below 122.50 trend-channel support, the pair could easily extend its weakness towards its recent lows support near 121.75-70 area. A sustained break to fresh multi-month low now seems to open room for an accelerated fall towards its next major support near 119.00 mark, level not tested since March 2013.

Meanwhile on the upside, 123.00 round figure mark remains immediate hurdle to clear. Momentum above this immediate barrier should assist the pair towards the ascending trend-channel resistance level, currently near 123.75 area.