EUR/JPY reverses and falls to weekly lows

EUR/JPY lost almost a hundred pips during the American session making an important reversal. Now it is headed toward the lowest close since March 8. 

Earlier today, on the back of a stronger euro, EUR/JPY jumped to 121.82, hitting a 2-day high. The demand for the Japanese currency rose afterward on the back of a rally in US bonds and a sharp decline in equity prices on Wall Street. 

Recently the pair dropped to 120.60, reaching the lowest in 12 days. It remains near the bottom. The slide stopped, for now, above the 20-day moving average that stands at 120.60/70. 

Technical outlook 

Valeria Bednarik, Chief Analyst at FXStreet, points out that the 1-hour chart, the price is well below its 100 and 200 SMA, whilst technical indicators extended their declines within bearish territory. 

“In the 4 hours chart, the price is now below a bullish 100 SMA, with the 200 SMA now standing around 120.60, also a strong static support, while the RSI indicator heads south around 41, and the Momentum hovers directionless within bearish territory, all of which favors additional slides on a break below the mentioned support”, said Bednarik.