EUR/JPY extends recovery above 113.50

EUR/JPY  is about to post the first daily gain after collapsing on Friday following the results of the Brexit referendum. It has been rising since yesterday’s European session but still faces downside pressures. Today’s improvement in market sentiment pushed equity prices higher across the globe and weakened the Japanese currency.

The pair peaked today at 113.73 and during the last hours, it remained steady hovering around 113.50, consolidating daily gains of around 125 pips.

EUR/JPY technical outlook

It remains more than 700 pips below the level it had a week ago. If the recovery gains traction and the pair manages to end the month above 115.00 it could be a positive technical signal on a wider perspective.

In the shorter term,  according to Valeria Bednarik, Chief Analyst at FXStreet “the 4 hours chart shows that indicators are within neutral territory, but turning modestly lower ahead of US close, indicating limited buying interest at the time being. In the same chart, the 100 SMA maintains a sharp bearish slope well above the current level, suggesting recoveries will probably be short-lived, and that the background dominant trend remains firm in place”.