Forex: EUR/JPY retraces Asian losses

The Asian session pushed the Yen higher, probably in reaction to the G7 FX communiqué and following headlines, sending the EUR/JPY down to 124.78 low. However, the cross was able to fully retrace such losses and return to 125.75 opening price. Still, the market has been rejecting a move higher, with the pair finding its high at 125.89.

EMU industrial production rose +0.7% in December (MoM), beating +0.2% consensus. Annualized data rebounded from -4.0% to -2.4%.

“There is a potential diamond top in development on this chart, these are aggressive reversal patterns BUT they are so rare that for now I will stick to just looking for a retracement back to the trend line scenario”, wrote Commerzbank analyst Karen Jones, pointing to supports at 122.15 and 119.74 to provoke recovery.