Valeria Bednarik, chief analyst at FXStreet, explained that the EUR/JPY pair recovered from a daily low of 123.05 posted early Asia, erasing most of its Tuesday losses, as the EUR strengthened, while the JPY weakened on the back of improved risk sentiment. Key Quotes: "The daily chart, however, shows that the pair has set a lower low and a lower high daily basis, which means that the background bearish trend remains firm in place. Shorter term, and according to the 1 hour chart, the advance has sent the price back above its 100 and 200 SMAs that anyway remain horizontal, showing no actual directional strength. In the same chart, the technical indicators are giving some signs of upward exhaustion, turning south within overbought levels and suggesting the rally has stalled for now. In the 4 hours chart, the technical picture supports the upside, given that the price is advancing above its 100 SMA while the technical indicators are heading south above their mid-lines. The pair needs to extend above the 124.90 resistance to be able to recover further ground, with a recovery beyond 126.00 required to confirm a bullish tone in the pair." For more information, read our latest forex news.