EUR/JPY Price Analysis: Steady around 128.20s after Tuesday’s volatile session

As the New York session ends, the EUR/JPY advance some 0.24%, trading at 127.88 at the time of writing. The market sentiment is upbeat at press time, following a risk-off European session, with all of its indices in the red. In the US, equity indices finished the session with gains, rising between 0.52% and 1.66%.

Market participants reassess the impact of the new COVID-19 Omicron variant. Although it has been reported to be more transmissible, it appears to cause mild symptoms. Apart from that,  the US central bank looking to finish the bond taper in the Q1 of 2022 dented the prospects of safe-haven assets like the Japanese yen, with US equities rallying and US bond yields following their footsteps.

EUR/JPY Price Forecast: Technical outlook

In the 1-hour chart, the EUR/JPY pair is trading sideways. In the overnight session, EUR/JPY bulls pushed the pair towards the confluence of the 50 and the 100-hour simple moving averages, around 128.20, failing to break above it. That left the pair, at the mercy fof JPY bulls, which sent the pair tumbling towards 127.70.

It is worth noting that the pair has a downward bias in the near term, as the 1-hour moving averages (MA’s) reside above the spot price. If the EUR/JPY keeps falling further, the first support would be the December 1 high 127.56.  A breach of the latter would expose the 127.00 figure, followed by February 9 swing low at 126.43.

On The flip side, the first resistance would be 128.00. A break above that level would expose the November 30 high at 128.60, followed by the 200-hour SMA at 128.62.