Forex: EUR/JPY offered toward 106.00; yen more bid

FXstreet.com (San Francisco) - The EURJPY sits flat around 106.35, having traded as high as 106.60 earlier in the day in an attempt to close the gap seen at the weekly opening, but then retreated back to current levels. As the market pulls back from 78.6% retracement resistance tested last week, the downside appears to be the path of least resistance. "Profit takers are certain to resurface near 107.00 as the week progresses," says Sean Lee, founder of FXWW. "More medium-term bulls are also sure to emerge on any dips towards the break-up level at 104.80."

This week, the market will look to the Japanese election next Saturday as key event risk for JPY, and the general consensus is for yen weakness in anticipation of an LDP victory. If EURJPY breaks out of its tight holding pattern, there may be room to run until the 104.50 region (Oct 23 high). Bullish targets may be found at 106.80 (intraday), while a more pronounced selling of the yen may target 108.50 (Mar 22 low).

USDJPY is now getting some selling interest in relatively thin trading, which is now attracting bears in EURJPY - last quoted at a fresh intraday low of 106.25.