EUR/JPY flirts with drop towards lowest levels since October last year

Technical Analysis

Author: Justin Low | eurjpy

EUR/JPY eases to its lowest level since 15 October as price takes a peek under the 14 November low at 119.25

EUR/JPY D1 13-02
The pair is barely keeping above the 14 November low @ 119.25 as price touches a low of 119.23 during the session, marking the lowest level since 15 October.

From a technical perspective, this could be yet another slippery slope that works against the euro currency - much like EUR/USD - as we see the market grapple with a more risk-off mood in trading today amid coronavirus fears.

A firm break below the 14 November low sees an empty chasm before the pair runs into key support from the lows last October around 117.08 next.

Fundamentally, things can still turn around for the pair if the market starts to be more hopeful surrounding the coronavirus outbreak situation. But the worst-case scenario is that we see virus fears intensify and that will accelerate EUR/JPY downside two-fold.

On the one hand, the yen will benefit from the risk-off environment in the market. But also as the coronavirus impact threatens to be more large-scale, it will dampen further hopes of any potential euro area recovery this year and weigh on the euro.

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