EUR/JPY has a quick look at sub-134.00 levels

EUR/JPY extends three-day losing streak.
Focus on risk sentiment.
Technicals suggest the pair may have topped out.

Omkar Godbole FXStreet Contributor

EUR/JPY extended the three-day losing streak in Asia and hit a intraday low of 133.97 amid risk-off action in the stock markets.

The Yen remains well bid on fears that the rising bond yields (bear market in bonds) could derail the equity market rally. Asian equities are likely feeling the heat of an uptick in bond yields. As of writing, stocks in Australia and New Zealand are down at least 0.5 percent each. Also, major US index futures are down 0.10 percent.

The cross may extend the decline if the European equity markets turn risk averse. A (possible) rise in the german yields may not put a bid under the Euro, given the focus is on the spike in the US 10-year yield.

EUR/JPY Technical Outlook

Bearish reversal confirmed? - Friday's bearish hammer and a negative follow through this week indicates the rally from the Dec. 15 low of 132.05 has ended. A close below 134.49 (Oct. 26 high) could be read as a bearish reversal.

On the downside, support is lined up at 133.36 (50-day MA), 132.70 (100-day MA) and 132.05 (Dec. 15 low).

On the higher side, resistance is seen at 134.56 (session high), 135.18 (5-day MA + 10-day MA) and 135.63 (Jan. 2 high).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bullish	Neutral	High
1H	Bullish	Oversold	Low
4H	Bullish	Neutral	High
1D	Bearish	Neutral	Expanding
1W		Overbought	Low
Updated Jan 10, 02:30 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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