EUR/JPY Tumbles to Over Three-Year Low Level of 121.00
After flirting with 122.00 support for major part of the day, the EUR/JPY pair finally broke through the handle support and tumbled to 121.00 mark, its lowest level since March 2013.
The EUR/JPY bears got a boost after the ECB Mario Draghi hinted that the central bank could further push interest-rates deeper into negative territory. The comments were in total contraction with his statement at the March meeting that interest-rates might have bottomed, sending the shared currency sharply lower across the board.
The ECB left its monetary policy unchanged and revised its economic and inflation forecast for 2016 with an attached warning of downside risk to the projections.
Meanwhile, Yen has been surging on risk-aversion as depicted by fall in European and US equity markets. This coupled with BoJ board member Takehiro Sato's harsh comments on Japan's negative interest-rate policy, further boosted the Japanese currency.
Although the pair is attempting a recovery from lower levels, but a convincing break below 122.00 handle points to extension of the pair downward trajectory in the near-term.
Technical levels to watch
Any attempts of recovery now seems to confront immediate resistance near 121.60-65 area, followed by resistance at 122.00 important support break-point, now turned resistance. This 122.00 handle resistance now seems to cap any near-term recovery for the pair.
Meanwhile on the downside, the pair now seems vulnerable to extend its downward trajectory towards testing its next major support near 119.00 handle, with intermediate support near 120.00 psychological mark.