EUR/JPY taps 124.00 and retreats after ECB announcement

The EUR/JPY cross gained some additional traction and jumped to session tops near 124.00 handle post ECB decision, albeit quickly retreated back to pre-announcement level around 123.70 region.

Spot caught some fresh bids and spiked around 20 pips after the European Central Bank, on expected lines, left the benchmark interest rate, the deposit facility rate and its marginal lending rate unchanged at 0.0%, -0.4% and 0.25, respectively. 

The governing council also maintained the size of its quantitative easing program at a monthly pace of €60 billion until the end of December 2017, or beyond, if necessary. 

Against the backdrop of recent developments, economic growth shifting into higher gear and declining political risks, investors now look forward to the post-meeting press conference for clues on when and how the ECB could scale back its massive asset purchase program. 

Hence, comments from the ECB President Mario Draghi's would be closely scrutinized and should infuse a fresh bout of volatility across EUR crosses. 

Technical levels to watch

A follow through up-move beyond the 124.00 handle now seems to lift the cross towards 124.50-55 intermediate resistance en-route 124.85-90 region. Alternatively, sustained weakness below the 123.00 handle could accelerate the slide towards mid-122.00s, below which the cross is likely to extend the slide further towards the 122.00 handle ahead of 50-day SMA important support near 121.40 region.