EUR/JPY consolidating above 121.00 handle, eyeing ECB for fresh impetus

The EUR/JPY cross regained some fresh traction near the 121.00 region but now seems to have entered a consolidation phase ahead of the ECB announcement. 

Currently trading around 121.30-40 bond, the cross has now recovered previous session's retracement from one month tops, albeit has been showing reluctance in building on Tuesday's break-out momentum above 100-day SMA hurdle. 

Even earlier during Asian session, the cross had a muted reaction to the BOJ's decision to maintain status quo and leave its monetary policy stance unchanged. However, an offered tone surrounding the Japanese Yen seems to be only factor helping the cross to hold in positive territory through European trading session.

   •  BoJ offered no fireworks today – BBH

Market now seems to look beyond initial euphoric reaction to Emmanuel Macron's victory in the first round of the French Presidential elections, with regional fundamentals regaining spotlight and driving sentiment surrounding the shared currency. 

Hence, investors eagerly wait for the ECB monetary policy decision, which would help determine the next leg of directional move for the common currency. Meanwhile, the preliminary release of German CPI print would also provide some impetus for the cross.

   •  ECB to maintain status quo – HSBC

Technical levels to watch

Momentum above one-month high resistance near the 122.00 handle is likely to confront resistance near 122.25-30 zone, above which a fresh leg of up-move is likely to lift the cross beyond 122.80 horizontal resistance towards reclaiming the 123.00 handle.

Alternatively, weakness below the 121.00 handle is likely to find support at 100-day SMA near 120.60 region, which if broken is likely to drag the cross back towards the key 120.00 psychological mark.