EUR/JPY pares losses, jumps to 111.90 ahead of Draghi speech

Extending its reversal from the vicinity of 115.00 handle, touched in the previous week, the EUR/JPY pair dropped to 111.00 level on Wednesday before retracing from session low to currently trade near 111.90 area.

Yen continues to soar as renewed Brexit jitters is seen boosting the safe-haven demand for the Japanese currency. Meanwhile, the shared currency is witnessing the spillover effect of intense selling pressure surrounding the British Pound, resulting to a sharp drop in the EUR/JPY cross.

The pair dropped to a fresh two-week low level before staging a minor recovery ahead of ECB President Mario Draghi's speech at the ECB Statistics Conference, in Frankfurt. Moreover, a possibility of BOJ intervention is also helping the cross to attempt a tepid recovery from lower levels.

In absence of any major economic releases on Wednesday, traders would continue to take cues from sentiment surrounding global equity markets (riskier asset class) and from any news/ developments around the historic Brexit referendum.

Technical levels to watch

Recovery momentum above 112.00 round figure mark might confront resistance around 112.35 level, above which the cross seems to extend the recovery trend immediately towards session high resistance near 112.75-80 zone. On the flip side, weakness back below 111.50-40 immediate support now seems to force the pair to break through 111.00 round figure mark support and head towards retesting Brexit-led swing lows support near 109.50, with 110.00 psychological mark acting as intermediate support.