EUR/JPY tests 130.00 as it heads for lowest close since March

• Euro weak after Eurozone data.
• Yen gains ground as USD/JPY retreats.

The EUR/JPY pair moved all day with a bearish bias and near the end of the session, it is trading near the 130.00 zone, at daily lows. The pair bottomed at 129.96. Despite not reaching new intraday lows for the month, it is headed toward the lowest daily close since March 23.

The euro versus the yen is falling for the eight-time out of the last nine trading days. The risk aversion environment helped the Japanese currency during that period while the latest EZ economic data was not favorable to the Euro. Today it was the Sentix Index that came in at 19.2 below the 21.2 expected.

EUR/USD was able to recover the 1.1900 area and helped the euro. At the same time, USD/JPY pulled back from 109.40 to the 109.00 area and limited the potential rebound of EUR/JPY.

Technical outlook

The EUR/JPY chart continues to point to the downside. The area around 130.00 is under pressure and a consolidation below could open the doors to more losses. Below the next support might be seen at 129.55/60 and 129.15.

Technical indicators show oversold conditions and not a clear signal of a correction. It the euro manages to hold on top of 130.00, a rebound seems likely. Immediate resistance is seen at 130.15/20 followed by 130.55 (May 7 high) and 130.85/90.