EUR/JPY analysis: strong bearish momentum supports lower lows ahead

EUR/JPY Current price: 128.45

The Japanese was once again the best performer across the FX board, in a combination of persistent risk aversion and softer-than-expected US data. US inflation at factory levels fell into negative territory for the first time in a year, further backing the case for a slow tightening path coming from the Fed. Stocks also weighed on the cross, as worldwide equities closed deep in the red, anticipating also a rough day for their Asian counterparts. The pair settled at its lowest in two months around 128.40, and retains the bearish stance seen on previous updates, given that in the 4 hours chart, the price is further below its 100 and 200 SMAs, with the shortest barely gaining downward traction above the largest, both far above the current level and reflecting the strong bearish momentum seen lately. Technical indicators in the mentioned chart have decelerated, but are currently consolidating within oversold territory, indicating further declines are  likely after this period of consolidation, moreover on a break below 128.21 the daily low.

Support levels: 128.20 127.90 127.45

Resistance levels: 128.80 129.30 129.65  

View Live Chart for the EUR/JPY

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