EUR/JPY - Above 125.00, bullish 50-DMA & 100-DMA crossover

EUR/JPY extended two-day winning streak in Asia to a 5-day high of 125.27 levels as the Japanese Yen remains on the back foot amid gains in the US and Asian stocks.

The sharp rebound from the low of 123.15 (May 30 low) has led to a bullish 50-DMA and 100-DMA crossover.

US stocks back at record highs

US stocks rose to record highs on Thursday after the ADP report shows the job market continues to improve. S&P 500 ended at 2430; up 18 points. The risk-on action pushed the Nikkei index above 20K levels for the first time since December 2015. The improved risk appetite is keeping the Japanese Yen under pressure.

EUR/JPY could extend gains further towards critical resistance of 125.85 levels if the US non-farm payrolls and wage growth numbers beat estimates.

EUR/JPY Technical Levels

The daily chart shows flag and pole pattern. The RSI is once again turning higher, while the MACD shows the bears have run out of steam.

A daily close above 125.85 (flag resistance) would signal continuation of the rally from the low of 114.85. Resistance at 127.91 (Apr 2010 high) could then be put to test. On the lower side, breach of support at 124.47 (monthly low) would open up downside towards 123.72 (Jan 2017 high).