- EUR/JPY posts weekly losses close to 4% as traders prepare for the weekend.
- A gloomy market mood fueled by the escalation in the conflict between Russia and Ukraine weighed on the EUR.
- EUR/JPY Technical Outlook: Although skewed to the downside due to the nature of Friday’s crash, it could be subject to a mean reversion move.
The EUR/JPY, deeply affected by a gloomy market mood, plunges 270 pips on Friday due to the Russian military seizure of Europe’s largest nuclear plant in Zaporizhzhia, Ukraine. At 125.36, the EUR/JPY reflects the risk-off market mood and the prevailing weakness of the common currency across the board.
As mentioned above, the market mood remains bearish, fueled by the growing tension between Russia and Ukraine. Global stock indices post substantial losses, while in the currency space, the JPY is alongside the winners pack, while the EUR lags behind, down 1.42% so far on the day. Against the Japanese yen, the common currency depreciated 3.85% in the week.
EUR/JPY Price Forecast: Technical Outlook
EUR/JPY has a bullish bias but would be subject to a mean reversion move after Friday’s 270 pip drop. The daily moving averages (DMA) are about to turn from a bullish to a bearish order, which could be achieved in the short term.
In the event of a mean reversion move, the first resistance for the EUR/JPY would be the lower trend line of a descending channel, around 126.95. A break of the latter would expose the resistance of the 38.2% Fibonacci Level at 128.15, which once broken, would open the door towards the resistance of the 50% Fibonacci Level at 129.111.
Additional technical levels
Source: Fx Street
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