EUR/JPY accelerates slide toward 124.00

• Yen strengthens as equity prices in Wall Street turn lower and US yields remain at weekly lows.  
• Euro holds fails to recover, remains pressured by EZ data.  

The EUR/JPY pair continues to slide and approaching 124.00. Recently dropped further and bottomed at 1245.23, the lowest level since March 29. It is trading at the lows, under pressure, and with a strong negative tone despite oversold readings in short-term technical indicators.  

The pair has been falling constantly since the beginning of the day. Over the last 48 hours, only rose for a moment yesterday during the American session, before resuming the downside. The combination of a stronger yen amid global risk aversion and a weaker Euro affected by the latest round of Eurozone economic data. ECB Vice-President Luis de Guindos said today that we cannot be ‘super optimistic’ on the European economy.

Earlier today, the Bank of Japan left its monetary policy unchanged and downgraded inflation and growth projections. It revised its forward guidance and mentioned it now expects to keep extremely low interest rates until at least the spring of 2020. The meeting had no relevant impact on the yen.  

Levels to watch  

If the pair keeps falling the next support emerges at 124.00 and below, March lows at 123.60/65 would be exposed. On the upside, the euro needs to recover on top of 125.60 (horizontal level and 20-day moving average) to remove the bearish pressure. Before that level, supports might be seen at 124.60 and 124.95.