Currently, EUR/JPY is trading at 118.06, down -0.22% on the day, having posted a daily high at 118.40 and low at 117.43.

EUR/JPY is trying to stabilize after the heavy supply witnessed mid-March from 122.87 down to 117.43 lows scored by the bears today. The cross is caught up with risk-off sentiment that has fuelled a drive in the yen. The stock market took a big hit this week but has recovered on Wall Street today, by some degree, although still leaving the cross behind. USD/JPY is yet to recover back onto the 111 handle while the dollar consolidates awaiting the FOMC minutes tomorrow and nonfarm payrolls report at the end of the week. 

USD/JPY: awaiting turbulence from Trump-Xi meeting - Scotiabank

Thereafter, markets will be turning to the French elections as the next major catalyst. However, this could be a booster for the euro on a pro-EU outcome, as suggested by economist Kit Juckes at Societe Generale. "EUR/USD looks more likely to push higher after a period of consolidation than to drift lower. 1.10 is reachable, and longer term, we're still looking for EUR/JPY to trade well above 130."

EUR/JPY levels

Analysts at Commerzbank suggested that EUR/JPY's near-term outlook is neutral to negative: "EUR/JPY has eroded the 118.25 24th February low and remains vulnerable to losses to the 117.30 2016 to 2017 uptrend, which is expected to hold. Intraday rallies are indicated to fail circa 120.40/75."

We have seen a test of that low today and a daily close below the 118 handle sets up further risk of a break lower that could undermine the more bullish scenario if the cross breaks below 117.19, an area of key support as explained further: "Longer term outlook is neutral to positive: Offered short term and needs to stay above 117.19 the 2016-2017 uptrend for the longer term positive bias to be maintained. Where are we wrong near term? Above the 120.52 near term downtrend the 4-month resistance line at 122.59. Initial resistance lies at 121.84, the 21st March high."