EUR/JPY retakes 120.00 mark and beyond

Having plunged closer to the very important 200-day SMA, the EUR/JPY cross managed to recover over 100-pips from session lows and is now building on to its recovery move back above 120.00 psychological mark. 

Currently trading around 120.35-40 region, the cross has managed to recovery from a weekly bearish gap opening and subsequent drop to session low level near 118.70 region led by the outcome of Italian referendum. Italian voters rejected Prime Minister Matteo Renzi’s constitutional reforms proposal in a referendum on Sunday. Prime Minister Renzi also made clear about his intensions to step-down, which means a fresh election in the first half of 2017. 

The resulting risk-off sentiment boosted the Japanese Yen's safe-haven appeal and weighed heavily on the EUR/JPY cross. 

Later during the day, the final version of Euro-zone PMI prints would be overshadowed by fresh news / developments surrounding the political uncertainty in Italy, ahead of this week's key ECB meeting on Thursday.

Technical levels to watch

Immediate upside resistance is pegged near 120.80 region above which the cross seems dart back towards recent multi-month daily closing highs resistance near 121.65-70 area. On the downside, renewed weakness back below 120.00 mark now seems to find support near 119.70-65 region below which the cross is likely to head back towards testing sub-119.00 handle.