Forex: EUR/JPY bounces back to 114.00 mark

FXstreet.com (Barcelona) - One of the strongest FX crosses seen late in 2012 was the EURJPY, that found its highest price this Wednesday at 115.99 as investors cheered the resolution of the US fiscal cliff issue. Now that the attention is shifting to the US debt ceilling, with IMF's spokesman Gerry Rice remarks, warning that the US government has to do better to put its public finances back on a sustainable path, the pair changed to an extended profit taking mode.

The EURJPY plunged to 113.68 low during the European session, ahead of the US ADP employment report that came in at 215K in December, much better than the expected 133K added jobs and almost doubling the previous month figure of 118K, the EURUSD regained the 1.3100 ground.

The Yen is consolidating past week's losses made in antecipation to Japan's election of the new government headed by LDP's Shinzo Abe. The new Prime Minister plans to create strong stimulus packages and push the BoJ to target 2% inflation.

The EURJPY was able to bounce back to 114.00. "Even though the general overbought conditions call for a phase of weakness, the longer-term configuration favors further strength towards the strong resistance at 123.33 (11/04/2011 high)", wrote MIG Bank analyst Bijoy Kar, pointing to hourly supports at 114.13 (01/01/2013 low) and 113.20 (31/12/2012 low).