EUR/JPY Price Analysis: Failure at 129.00 could pave the way towards 127.50
|- EUR/JPY slides for the second day in a row, break beneath 129.00.
- Chinese real-estate sector worsens, as Fantasia Holdings Group failed to pay bond interest.
- EUR/JPY: From a technical perspective, the pair might consolidate before resuming the downtrend.
The EUR/JPY begins the Asian session on the wrong foot, is trading at 128.90, down 0.08% at the time of writing. The market sentiment is a mixed bag, as witnessed with Asian equity futures, splitting between winners and losers. However, problems in the Chinese real-estate sector keep piling up. Now, Fantasia Holdings Group Co. didn’t repay a $205.7 million bond that was due on Monday. The high-beta currencies are up against the greenback in the Forex market, except for the euro, which is down 0.03%.
EUR/JPY Price Forecast: Technical outlook
Daily chart
The ER/JPY is trading below the daily moving averages (DMA’s), suggesting that the pair is in a downtrend. On Monday, the cross-currency tested the confluence of a downward slope trendline and the 50-DMA around 129.39 but retreated aggressively below 129.00.
For the EUR/JPY to resume the downtrend, they will need a break below the October first low at 128.54. In case of that outcome, the first support would be the September and August lows around 128.00. A breach of that level would expose the July 1 high at 127.49.
On the flip side, for EUR/JPY buyers, a daily break above the 200-DMA at 129.72 is required to regain control. In case of achieving the latter, the first supply zone would be 130.00. A break of the latter could open the way for further gains, but some key supply zones would be ahead. The critical resistance levels would be the September 29 high at 130.46, followed by 131.00.
The Relative Strength Index (RSI) is at 44, flattish, suggesting that the pair might consolidate around the current level.
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