EUR/JPY recovery capped by 5-DMA, hovers around 128

By FXStreet FXStreet (Mumbai) – The EUR/JPY’s recovery lost legs at 5-DMA in the European session, as the common currency continues to get hammered, despite the ongoing weakness in the European equities.

EUR/JPY supported at hourly 100-SMA at 127.82

Currently, the EUR/JPY pair trades 0.25% lower at 128.03, struggling to hold above 128 handle. The cross in the EUR/JPY extends its choppy-trend into Europe and keeps the offered tone alive as the demand for the safe-haven yen remains intact amid risk-off market profile globally.

Adding further to the bearish pressure, the EUR/USD pair remains weaker as divergent monetary policy outlooks between both continents returns to investors’ minds ahead of the Fed decision due tomorrow. Meanwhile, the US consumer confidence and flash services PMI data will be watched for fresh USD moves.

EUR/JPY Technical Levels

To the upside, the next resistance lies at 128.20/24 (1h 50 & 20-SMA), above which it could extend gains to 128.54/64 (Jan 25 High/ daily R1). To the downside, the cross finds immediate support at 127.82 (daily low/1h 100-SMA), below that 127.48/40 (daily S2 Jan 12 Low), could act as a major support.
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Source:: FX Street