• EUR/JPY attempts a mild rebound following Wednesday’s drop.
• The August top at 138.39 caps the upside for the time being.

EUR/JPY bounces off weekly lows in the 136.60/50 band and reclaims part of the ground lost on Wednesday’s strong retracement.

So far, the August recovery appears to have met some initial resistance in the 138.40 zone (August 10). If the cross regains upside traction and surpasses this level, it could then extend the move to, initially, the 55-day SMAs, today at 139.06.

While above the 200-day SMA at 133.87, the outlook for the cross is expected to remain constructive. This contention zone also appears underpinned by the proximity of the August low at 133.39 (August 2).

EUR/JPY daily chart