EURJPY is now fully 600 points off the lows set in pre- French election as all of the investor jitteriness has clearly been wrung out of the pair. It’s difficult to see how much more upside there is in the move given the fact that the market has already priced in a Macron victory. EURJPY may also be trading on positive sentiment vis a vis US policy as traders await tax reform legislation from Congress, but any action on that front will take months to achieve.

In the meantime, tomorrow’s US ADP data and ISM Non-Manufacturing reports could put a serious dent in the rally if they disappoint to the downside. So far FX markets have been ignoring weak US data, but if the labor numbers prove soft the prospect of a June rate hike will fade and so with it the relentless rally in yen pairs.

EURJPY has a massive triple top at the 123.00-124.00 corridor and would need a fresh burst of momentum to clear such stiff resistance. A correction could take it to 120.00 and still preserve the nascent uptrend