FXStreet (Mumbai) - The cross in the EUR/JPY extends its descent from 131.64 highs reached in the last US session and now mires near the lower range of the recent consolidation phase below 132 handle.
EUR/JPY capped below 5-DMA
Currently, the EUR/JPY pair trades -0.06% lower at 131.29, testing lows at 131.27 reached last hours. The bearish grip on the EUR/JPY cross remains intact on the back of the ongoing weakness in EUR/USD coupled with a better bid yen against its American counterpart this session.
The cross came under renewed selling pressure on Tuesday after a Dec rate rise was confirmed by the US inflation numbers, which knocked-off the common currency across the board.
In the day ahead, markets will focus on the US housing data while the main risk for the cross remains the upcoming FOMC minutes.
EUR/JPY Technical Levels
To the upside, the next resistance lies at 131.48 (5-DMA), above which it could extend gains to 131.83/87 (1h 100-SMA/ 10-DMA). To the downside, the cross finds immediate support at 131.20 (Nov 17 Low), below that 130.87 (Daily S2), could act as a major support.
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