EUR/JPY pares Monday’s losses and braces to 126.00

The shared currency recovers some ground versus the low-yielder and the safe-haven Japanese yen amid a risk-off market mood. Factors like Russia upholding ceasefire along Ukraine corridors and a Eurozone significant joint bond sale to finance defense and energy boosted the EUR, which gains vs. most G8 currencies on Tuesday. At press time, the EUR/JPY is trading at 126.12.

Late in the New York session, the market sentiment improved, portrayed by US equities rising. In Asia, stock market futures fluctuate, though it usually carries on Wall Street’s close. Worth noting is the oil embargo by the US and the UK. US President Joe Biden said that the US would ban imports of Russian fossil oil, while UK’s Prime Minister Boris Johnson said that the UK would not allow imports of Russian crude, but it would allow coal and natural gas.

On the same note, Russia’s President Putin signed a decree restricting the import and export of specified goods and raw materials until December 31.

EUR/JPY overnight, the pair was range-bound in the 125.14-60 area before piercing the 126.00 mark on the Euro bond news. When North American traders got to their desks, the pair rallied above the 100-hour simple moving average (SMA)  to 126.72.

EUR/JPY Price Forecast: Technical outlook

EUR/JPY’s Tuesday’s jump near the bottom-trendline of a descending channel, the cross-currency pairs remain bearish biased. That said, the EUR/JPY first support would be the 126.00 mark. Breach of the latter would expose the January 18 low at 125.08. Once cleared, the next support would be the YTD low at 124.39, followed by crucial support levels. November 27 and 19, 2020, at 123.90 and 122.84, respectively.