EUR/JPY erase early gains, turns flat at 114.00

Global risk-on sentiment is seen denting the perceived safety of the Japanese Yen and assisted the EUR/JPY cross to register some tepid gains on Monday. The pair, however, has erased early gains and moved back to currently trade around Friday's closing level, just above 114.00 handle.

On Friday, the cross pared some of its weekly gains to 114.80 region with a slight pick-up in global risk aversion. The weakness, however, was short-lived with the pair managing to recover and provide a weekly close above 114.00 handle. 

The pair on Monday added on to its recovery from Friday's session low level of 113.68 and was benefitted from renewed global risk-on trade but is unable to gain traction because of a broadly weakening Euro. However, trading action around the cross is likely to remain quiet on the back of Independence Day holiday in the US markets. Moreover, an empty economic docket would provide little in terms of economic triggers for any strong momentum play. 

Technical levels to watch

Below 114.00 handle, the pair could immediately drop to test 113.60-50 support area, which if broken would negate possibilities of any further near-term recovery for the pair. A follow through selling pressure below 113.50 support should easily drag the pair back towards 112.30 support area, with intermediate support around 112.80 region.

On the flip side, the pair need to build on to its momentum above 114.50 immediate resistance, above which it could rise to 115.50 intermediate resistance before heading towards its next major resistance near 117.00 handle.