EUR/JPY: Pullback from 6.5-week high stalls near 124

• EUR/JPY trades near 124.00, having printed a multi-week high of 124.29 on Wednesday. 
• The upside seems to have stalled due to Overbought readings on technical indicators. 
• The focus now is on the EU Parliament's ratification process of the EU recovery fund.

EUR/JPY's corrective pullback from the 6.5-week high of 124.29 seen during Wednesday's early American trading hours looks to have stalled in the range of 123.90 124.00 in Asia. 

The retreat from 124.29 could be associated with the overbought reading on the 14-day relative strength index. 

Besides, the EUR bulls may have turned cautious ahead of the European Union (EU) parliament's ratification process of the recently agreed EUR 750 billion recovery fund. 

Scope for disappointment

Following the agreement on a new EU budget as well as the recovery package yesterday, the focus will "now turn to the ratification process where the national parliaments will have to consent to expand the so-called ‘headroom'," analysts at Danske Bank noted while adding that the EU parliament may likely be disappointed regarding the size of the final budget. 

The EUR pairs may suffer a deeper pullback if the Parliament objects to the size of the recovery fund. 

Also, the anti-risk Japanese yen would find takers, pushing EUR/JPY lower if the stock markets face selling pressure due to Sino-US tensions. The United States ordered the closure of the Chinese consulate in the Texas city of Houston on Wednesday, marking an unprecedented escalation of tensions with Beijing. 

Technical levels