EUR/JPY consolidates above 123.00 after hitting fresh 3-month highs

EUR/JPY gained momentum during the European session and accelerated the upside. The pair peaked at 123.60, the highest level since January 9. It pulled back modestly afterward and it was trading at 123.30, up 70 pips for the day. 

The recent rally started with a decline of the Japanese yen in the market. Then, despite the retreat of USD/JPY, EUR/JPY held above 123.00 amid a rally of EUR/USD to test 1.0940/50. 

Eyes 2017 highs 

The pair, that has risen more than 700 pips since April 17, is now headed toward the highest daily close since May 2016. 

The rally pushed the price close to 2017 highs that lie at 123.71; while December highs area located at 124.08. Since June of last year, the euro has been unable to consolidate significantly above 123.25. 

If the pair manages to hold well above 123.30, a strong technical level would be broken, giving signals of a continuation of the rally. While if the pair fails here, a bearish correction seems likely.