EUR/JPY clocks 28-month high of 136.96

EUR/JPY jumped more than 100-pips yesterday to a 28-month high of 136.96 on growing evidence of hawkishness in ECB ranks.

The bid tone around the EUR strengthened, possibly due to reports that some ECB officials fear the bank's vague language on the interest rate stokes market volatility and hence are urging President Mario Draghi to give investors a clearer signal on how long the institution will keep interest rates unchanged.

Further, ECB member Nowotny called for the central bank to consider ending their bond-buying program. So, EUR/USD rose to 1.25 levels in the overnight trade.

Meanwhile, the USD/JPY remained well bid above 109.30, courtesy of the rise in the US 10-year yield to 2.8 percent. Thus, EUR/JPY neared 137.00 levels. As of writing, the cross is trading at 136.80 levels.

EUR/JPY Technical Levels

A failure to hold above 136.64 (Jan. 5 high) could yield a pullback to 136.00 (zero levels) and possibly to 135.66 (10-day MA). On the other hand, a close above 137.00 (psychological hurdle) would open doors for 137.44 (September 2015 high) and 138.00 (psychological hurdle).