EUR/JPY extends break-out momentum, jumps to 1-1/2 month highs

The EUR/JPY cross has finally broken out of a four-day old consolidative trading range and extended the break-out momentum further beyond the 122.00 handle. 

Currently trading around 122.30-35 band, the cross maintained its bid tone for the third consecutive session and built on last week's strong gains led by Emmanuel Macron’s (pro-EU) victory in the first round of the French Presidential election. 

Also collaborating to the positive sentiment surrounding the shared currency was news that lenders have reached a deal on a package of bailout-mandated reforms with Greece.

Greek Fin Min: Lenders, Greece reach a deal on bailout reforms

Meanwhile, the prevalent risk-on environment, which tends to weigh on the Japanese Yen's safe-haven demand, also collaborated to the pair's strong up-surge to the highest level since mid-March.

Moreover, possibilities of some shorts being triggered, on a decisive break through the 122.00 important hurdle, could have further aggravated the up-move in the past hour or so. 

Eurozone manufacturing PMIs in focus - TDS

Traders now look forward to the final Euro-zone PMI prints for some short-term impetus, while the broader market risk-sentiment and any fresh political development in the region would remain key determinants of the pair's movement before the second round of election in France. 

Technical levels to watch

From current levels, the bullish momentum could get extended towards 122.50-55 resistance, above which the pair is likely to head towards March monthly highs resistance near 122.80-85 area ahead of the 123.00 handle.

On the flip side, any retracement back below the 122.00 handle now seems to find strong support near mid-121.00s, which if broken could extend the corrective slide towards the 121.00 round figure mark.