EUR/JPY Price Analysis: Overbought levels prompt some caution

• EUR/JPY clinches new 2021 highs just below 134.00 the figure.
• Initial support is seen in the mid-132.00s so far.

EUR/JPY broke above the consolidation theme and clinched fresh YTD peaks in the area just shy of the 134.00 yardstick, the highest level since February 2018.

Further upside remains well on the cards with the target at the 134.50 region, where coincide the September/October and early December 2018 tops.

The continuation of the buying pressure is likely as long as the cross remains underpinned by the immediate support line (off the March lows) near 131.00. This area is also reinforced by the proximity of the 50-day SMA.

However, a potential corrective move should not be ruled out in the very near-term, as EUR/JPY navigates the overbought territory, as per the daily RSI (74.21). Against this, there is an interim support around 132.50 (low May 24).

In the broader picture, while above the 200-day SMA at 127.02 the broader outlook for the cross should remain constructive.

EUR/JPY daily chart