Ever since the pair broke away from a long-held triangle on May 8th, the bearish bias has been dominant, and based on price action seen last week, there are technical indications suggesting that downside pressures are set to continue. It is worth noting that with ECB, BoJ meetings out of the way now for the next few weeks, and barring any major surprise coming out of EUR econ indicators, traders should feel reassured to keep pressing lower as prospects of major price disturbances have now been eliminated. That said, it is important to keep an eye on headlines related to Japan's GPIF, with authorities due to announce a re-allocation of assets sometime soon, an event that may wreak havoc the Yen should the Japanese government decide to aggressively diversify into riskier assets such as foreign bonds or domestics stocks.
According to Jim Langlands, Founder at FXCharts: "The cross has broken down below the 200 DMA (138.65) and looks as though it may be headed for the 4 Feb low at 136.22. That is some way off though and if we do head lower progress would most likely be be slow and choppy. If the 200 DMA can be regained then we could be in for another squeeze back to 140.00, but this looks a bit unlikely right now."