EUR/JPY rebounds from 23.6% Fib, back above 120.00

EUR/JPY was dumped earlier today on fears that the failure of Italian referendum would destabilize the nation and Eurozone.

However, the currency pair rebounded from 118.78 (23.6% of 2014 high - 2016 low) and was last seen trading around 120.15 levels.

US elections Déjà vu

The common currency dropped, while safe havens like Yen spiked after Italian PM Renzi lost the referendum on constitutional reforms and said he would resign.

The resulting risk-off pushed the EUR/JPY lower, although the recovery we are witnessing now is pretty much in line with the kind of action we saw after US election outcome.

Later in the day, the 2-year German yield is likely to guide the EUR/JPY cross.

EUR/JPY Technical Levels

The immediate hurdle is seen at 121.00, above which the gains could be extended to 121.45 (May 2016) and 121.89 (session high). On the lower side, break below 120.00 (zero figure) would open doors for a re-test of 119.00 (zero figure) and 118.78 (23.6% of 2014 high – 2016 low).