EUR/JPY pulls back to 124.00 after being rejected at 124.50
- EUR/JPY remains practically flat on the day after hovering around 124.00.
- The common currency loses momentum as market sentiment fades.
- EUR/JPY holding above key support at 123.80.
The euro has been trading back and forth both sides of the 124.00 level on Thursday, on a slightly negative tone, after peaking right above 125.00 earlier this week. Upside attempts seen earlier have been capped at 124.50, and the pair returned to 124.00, practically flat on the daily chart.
Yen picks up as risk sentiment sours
From a wider perspective, the common currency has been trading within a downward trending channel over the last three days, correcting lower after having rallied 1.30% amid Monday's risk rally to be capped at 125.10 resistance area.
The positive market mood witnessed earlier this week has cooled off over the last sessions, with the investors shifting their focus to the escalating COVID-19 cases in the US and Europe. Concerns about the economic impact of the second coronavirus wave have offset enthusiasm about the progress on the vaccine, with demand for safe-haven currencies like the yen increasing, in detriment of riskier assets like the euro.
EUR/USD: Important support at 123.80
At the moment, the pair remains supported above the confluence of the 50 and 100-day SMAs, at 123.80. A clear breach below there might open the path towards 123.15 (November 5 high) and 122.05 (November 5, 6 lows). On the upside, immediate resistance lies at 124.65 (November 11 high) and above here, 125.10 (October and November highs) and September 10 high at 126.45.
Technical levels to watch