• EUR/JPY lacks any firm intraday direction and oscillates in a narrow trading band on Monday.
• The technical setup warrants some caution before positioning for a further depreciating move.
• A convincing break below the 162.75-162.70 confluence will be seen as a fresh trigger for bears.

The EUR/JPY cross struggles to capitalize on Friday's modest bounce from sub-163.00 levels or a one-and-half-week low and kicks off the new week on a subdued note. Spot prices oscillate in a narrow band through the Asian session and currently trade around the 163.25 region, nearly unchanged for the day.

Speculations that Japanese authorities will intervene in the market to address any excessive falls in the domestic currency turn out to be a key factor behind the Japanese Yen's (JPY) relative outperformance. The shared currency, on the other hand, is undermined by rising bets for a June rate cut, bolstered by recent dovish remarks by European Central Bank (ECB) officials. This, in turn, is seen acting as a headwind for the EUR/JPY cross.

From a technical perspective, the recent pullback from the highest level since August 2008 stalled last week ahead of the 163.000 mark. This is closely followed by the 162.75-162.70 confluence – comprising the 100-day and the 200-period Simple Moving Averages (SMA) on the 4-hour chart, and the 50% Fibonacci retracement level of the March rally. A convincing break below the latter will be seen as a fresh trigger for bearish traders and pave the way for deeper losses.

The EUR/JPY cross might then accelerate the slide towards the 162.20 region, or the 61.8% Fibo. level, before dropping below the 162.00 round-figure mark, towards testing the next relevant support near the 161.35-161.30 zone