EUR/JPY reverses over 150-pips from multi-month highs

Selling pressure around the shared currency has intensified, with the EUR/JPY cross reversing over 150-pips from multi-month highs touched immediate after ECB decision announcement.

Currently trading back below 122.00 handle, the cross came under intense selling pressure after opening comments from ECB President Mario Draghi revealed central bank's readiness to keep interest rates lower for extended period and act further. Draghi further added that the central bank will use all tools in the central bank's mandate as the governing council doesn't expect to hit inflation target within forecast horizon. 

Meanwhile, renewed buying interest around the USD/JPY major extended some support for the time being and limited further downslide for the EUR/JPY cross, which earlier surged through 123.00 handle and touched its highest level since May 31.

Technical levels to watch

From current levels, weakness below 121.60 immediate support is likely to get extended towards 121.15 horizontal support below which the cross runs the risk of dropping back below 120.00 psychological mark. On the upside, 122.00 handle now becomes immediate resistance, which if cleared might lift the cross towards 122.50 resistance. Sustained move above 122.50 level might now trigger a fresh bout of short-covering and lift the cross back above 123.00 handle.