The pair is headed toward the third consecutive week with negative performance. The Dollar has accumulated a decline of almost 400 pips since it rose to 93.75 on January 7.
EUR/JPY was rejected from levels above 128.00 and currently is testing a support zone at 127.00. The pair tumbled during the Asian session to 126.50, the lowest price since April.
Regarding EUR/JPY, James Chen, chief technical analyst at FX solutions affirms: (it) has descended all the way down to reach and dip below key support around the 127.00 price region. This occurs within the context of a prolonged sideways trading range that the pair has been entrenched in since at least mid-2009.
A strong breakdown and daily close significantly below the noted support around 127.00 could potentially indicate additional bearish pressure targeting further downside support targets, James says, as he locates at 122.00 a key longer-term bearish target.