EUR/JPY dropped to a new three-year low of 116.95 this morning. The long term trend has been clearly bearish since a year ago when prices started falling from the June 2015 peak of 141.04.
The technicals are supporting a bearish bias as the 50-day moving average is below the 200-day moving average and both lines are falling. MACD is below zero in bearish territory.
Currently the pair is testing the key 117.00 level. If there is a daily close below this, prices would target the 61.8% Fibonacci retracement level of the upleg from 94.09 to 149.76 at 115.35.
Strong resistance lies at the 50% Fibonacci level at of 122.00 and the market would have to move back above this level in order to weaken the bearish bias.
In the short term EURJPY may consolidate and pause its decline since RSI has reached oversold levels and is now below 30.
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