Forex: EUR/JPY looking overbought, set for bearish correction?

FXstreet.com (San Francisco) - EURJPY holds a slight bid tone ahead of the Tokyo fix, underpinned by USDJPY buying interest, after the euro slid 150 pips against its Japanese counterpart yesterday on safe haven bids after the latest Fed minutes weighed on risk sentiment. The cross now stands at 114.10 from an intraday low of 113.77, while USDJPY has managed to extend bullish gains to 87.75 so far this Friday, reaching fresh 2-year highs.

Technically speaking, the 200-week EMA (114.53) looks to be attracting sellers after price failed to reach 78.6% retracement resistance around 117.00. Studies in long-term timeframes show the market in overbought territory, so bears may be looking for more reasons to short in the week ahead. For now though, in the short-term, EURJPY may be still be a good candidate for 'buy-on-dips' given expectations of further easing from Japanese officials.