EUR/JPY rises back above 129.00, correction over?

EUR/JPY is rising on Monday and still remains in a range in a consolidation range, moving between 129.50 and 128.50. Last week, the pair reached the highest level in more than a year at 130.74 but ended the week lower after correcting lower on Wednesday. 

What after consolidation? 

During the last three days, the price moved in a small range, unable to move significantly away from 129.00. The main trend continues to point to the upside. The decline from 130.74 removed the bullish momentum but the correction has been limited. 

A decline below 128.50, could clear the way from an extension toward 127.85/128.00 (Jul 4 & low / 20-day moving average). Under 127.85, the euro could weaken even further. On the upside, a confirmation on top of 129.50 would expose year-to-day highs and a potential resume of the upside. 

Key events ahead 

Thursday will be the key day for the pair. The Bank of Japan and also the European Central Bank will have their polity meetings. No change is expected to be announced. In Japan, some analysts see a small probability of more policy easing during the third quarter. In the Eurozone, the current policy guidance is expected to remain unchanged and Draghi could offer some clues for the September meeting, where some announcement is expected and that will include new forecasts. 

BoJ: what to expect this time around? - UOB

ECB to evolve its assessment and extend its removal of downside risks - BBH