Forex: EUR/JPY pulling back the 121.00 handle

EUR/JPY is pulling back last at 121.04 the channel base broken down around the 122 handle following Italian election results, off fresh 1-month lows at 118.73. The bounce comes on the back of mostly Yen weakness, as Euro is still stable around near session and 1-month lows 1.3072 last, knowing now that quite possibly there's need of another voting in Italy before year ends, given highly mixed results, which could difficult forming a government.

In the technical front, Valeria Bednarik, Chief Analyst at Fxstreet.com, notes: “The hourly chart shows extreme oversold levels, yet attempts of recovery found resistance in the 120.40 price zone, and with the pair below the 120.00 mark, I won’t be expecting much gains today, yet on contrary, spikes will likely provide selling opportunities,” she suggests, adding: “The 4 hours chart shows a strongly bearish bias, and a retest of the lows around 118.70 seem likely for today,” the analyst concludes.

Valeria sees support levels at: 119.45, 119.00 and 118.70, while resistance levels at: 120.40, 120.90 and 121.50.