EUR/JPY - Bull reversal confirmed, but risk-off plays spoil sport

• Bullish outside day reversal confirmed yesterday
• But the upside is being capped today due to risk aversion. 

The tables have turned in favor of the EUR/JPY bulls, courtesy of Friday's bullish outside day candle and yesterday's positive follow-through, still, the pair dropped in Asian session today. 

The retreat from the overnight high of 132.02 to 130.93 could be associated with the Trump's Chief Economic Advisor, Gary Cohn's resignation and the resulting risk aversion in the markets. The S&P 500 futures fell 1.4 percent after Cohn's resignation, pushing the Japanese Yen higher across the board. As of writing, the futures are trading 0.90 percent lower on the day. 

The partial recovery seems to have weakened the bid tone around the Japanese Yen, helping the EUR/JPY move back above the 200-day moving average of 131.39. That said, the currency pair is still reporting 0.18 percent losses on the day. 

Ahead in the day, the pair will likely continue tracking the S&P 500 futures. Also, the Eurozone Q4 GDP release (due at 10:00 GMT) could influence the common currency. 

AUD/JPY Technical Levels

A break above 131.73 (session high) would add credence to pair's recovery from the intraday low of 130.93 and would allow a stronger rally to 133.02 (Jan. 11 low) and 133.45 (100-day MA). On the other hand, a move below 131.05 (10-day MA) would open up downside towards 130.00 (psychological level) and 129.35 (Friday's bullish outside day candle low).