EUR/JPY reverses a dip to 3-month lows, finds support ahead of mid-119.00s

• Reports on the ECB strategy review exerted some downward pressure on the euro.
• The risk-on mood weighed on the JPY’s safe-haven status and helped limit losses.

The EUR/JPY cross dropped to near three-month lows in the last hour, albeit found some support ahead of mid-119.00s and quickly recovered around 30  pips thereafter.

The cross failed to capitalize on its intraday uptick to the key 120.00 psychological mark, rather met with some fresh supply and drifted into the negative territory for the fifth consecutive session.

The already weaker sentiment surrounding the shared currency deteriorated further after Reuters reported that the ECB's monetary policy review is unlikely to fix the house price inflation dilemma.

The exclusion of house prices while determining the inflation target led to expectations that it might result in lower consumer inflation and fueled speculations of lower interest rates for longer.

Meanwhile, the prevalent risk-on mood continued undermining the Japanese yen's perceived safe-haven demand and seemed to be the only factor lending some support, at least for the time being.

The cross might now be headed back towards the top end of its daily trading range. However, it remains to be seen if bulls will be able to capitalize on the attempted intraday recovery move. 

Technical levels to watch