EUR/JPY retreats after hitting fresh 21-month highs

EUR/JPY pulled back during the American session and erased most of the day’s gains. Price action remains limited ahead of tomorrow’s FOMC decision. On Thursday will be the turn of the Bank of Japan. 

EUR/JPY rejected from above 134.00

Earlier today the pair peaked at 134.16, the highest since December 2015. The euro failed to hold above 134.00 and declined, erasing gains. The retreat found support at 133.20/30. It was trading at 133.50/55, up less than 20 pips from Monday’s close, rising for the third day in a row. 

EUR/JPY lost momentum amid a retreat of euro in the market, following a Reuters report that suggested that ECB policymakers disagree on whether to set a firm end-date for the bond-buying program in October.

ECB policymakers disagree on setting a firm bond buying end-date in October - Sources

Levels to watch 

To the upside, resistance levels might be located at 134.15/20 (daily high) followed by 134.60 (Dec 2015 high) and 135.00 (psychological). On the flip side, support could be seen at 133.20 (daily low), 132.30 (Sep 18 low) and 132.00 (Sep 13 high).