EUR/JPY Price Analysis: The 126.00 area holds the downside so far

• EUR/JPY extends the correction lower to the 126.00 zone.
• Weekly lows in the 125.60 area emerges as the next support.

EUR/JPY’s selling momentum remains well and sound for the time being, although the 126.00 neighbourhood has so far emerged as quite a solid support. The proximity of the 21-day SMA near 126.20 also reinforces this contention area.

Further downside pressure is expected to meet initial and minor support at the 55-day SMA at 125.86 and carries the potential to drag EUR/JPY to last week’s lows near 125.60 (January 27) in the short-term horizon.

Looking at the broader picture, while above the 200-day SMA at 123.33 the outlook for the cross should remain constructive.

EUR/JPY daily chart