EUR/JPY analysis: more declines likely on renewed selling interest below 123.20

EUR/JPY Current price: 123.43

The EUR/JPY pair extended its decline down to 122.55, but trimmed most of its daily losses and settled in the 123.40 region, as Wall Street changed course mid American session to trade marginally higher ahead of the close. The Japanese yen got a boost at the beginning of the day from preliminary Q1 GDP figures, as the economy grew at an annualized 2.2% in the three months to March, beating market's consensus of 1.7%. Consumption and exports were the biggest contributors, lifting hopes that the economy will keep advancing and that inflation will reach BOJ's target of 2.0%. The movement looks corrective from a technical point of view, given that it settled above the 23.6% retracement of its latest bullish rally between 114.83 and 125.80 at 123.20, now the immediate support. Additionally, the 4 hours chart shows that the 100 SMA converges with the Fibonacci level, reinforcing it. Nevertheless indicators in the mentioned time frame support additional declines as the Momentum accelerated lower and stands at fresh monthly lows whilst the RSI resumes its decline after a modest upward correction from oversold readings.

Support levels: 123.20 122.80 122.40

Resistance levels: 123.95 124.40 124.85

View Live Chart for the EUR/JPY

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