EUR/JPY holds above 123.00 mark ahead of ECB

The EUR/JPY cross came under some renewed selling pressure and has now reversed all of its previous session's recovery gains from 3-week lows.

The latest BoJ headlines, that the central bank is re-calibrating its communications strategy to acknowledge future withdrawal of its massive monetary stimulus, without giving an impression that this is on the agenda anytime soon, helped negate disappointing Japanese GDP growth figures. 

Moreover, cautious environment ahead of today's key event risks further supported the Japanese Yen's safe-haven appeal and was seen weighing on the cross. This coupled with expectations of a downward revision to the ECB's inflation forecast further collaborated to the offered tone surrounding the cross.

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Spot, however, has managed to find some support near the 123.00 neighborhood and bounced back to mid-1.2300s as investors look forward to the ECB policy announcement and updated staff economic projections, due later during the European session. 

Technical levels to watch

Weakness below the 123.00 handle might continue to find some buying interest near mid-122.00s, below which the cross is likely to accelerate the slide towards the 122.00 handle en-route 50-day SMA support near 121.40 region.

On the upside, momentum above 123.80 level (session tops) now seems to lift the cross beyond the 124.00 round figure mark towards 124.50-55 intermediate resistance ahead of 124.85-90 region.