- Shared currency bulls failed to hold onto 136.00.
- Geopolitical developments in Eastern Europe turned the negative sentiment around as Russia backtracked, saying peace talks had made no progress.
- EUR/JPY Price Forecast: Short-term path of least resistance is skewed to the downside.
The EUR/JPY back in the American session, due to risk aversion in the face of the news from the Russian and Ukrainian front, since the negotiations have not progressed, as the French Foreign Minister pointed out. At the time of writing, the EUR/JPY is trading at 135.95.
Market sentiment turned gloomy mid-European session as Russia reported that despite Ukraine’s efforts they noted that there has been no progress as Russia redeploys troops to Donbas. That said, along with the Polish deputy prime minister saying that Russia is preparing a new attack in Ukraine confirms the continuation of hostilities.
Aside from this, the EUR/JPY traded in a 180 pip range overnight. In the Asian session, the cross reached its daily high at 136.66, pulling back in the European session as a series of negative sentiments hit the market, lifting safe-haven pairs, sending EUR/JPY towards 134.87. At the end of the American session, the shared currency gained traction towards current levels.
EUR/JPY Price Forecast: Technical Outlook
EUR/JPY price action over the past two days shows indecision around the pair. If it doesn’t break above or below Monday’s range, EUR/JPY will remain stuck in the 134.00-137.00 range, although the highs have been lower than each previous trading day for the past two days.
That said, the EUR/JPY could be heading lower, although it could find some obstacles on its way down. The first support of the EUR/JPY would be 135.30. A decisive break would expose 134.87, followed by 133.97.
To the upside, the first resistance on the EUR/JPY would be 136.00. A breach of the latter would expose 136.50, followed by 137.00, and the yearly high at 137.54.
Source: Fx Street