FxWirePro: EUR/JPY pauses downside at 50% Fib, BOJ no show and Kuroda cautious view keeps yen depressed

EUR/JPY chart - Trading View 

Technical Analysis: Bias Bearish

- EUR/JPY was trading 0.32% higher on the day at 128.43 at around 12:00 GMT

- The pair is holding 50% Fib retracement support at 127.87, further weakness on break below

- 'Death Cross' confirmation on the daily charts adds to the bearish bias

- Momentum indicators are bearish, but oversold conditions keep scope for some pullbacks

- 5-DMA caps minor upticks in the pair, while major recovery was rejected at daily cloud

- Price action has retraced below 200-month MA and 5-MA on the monthly charts has turned south

Support levels - 127.87 (50% Fib), 127, 126.53 (110-EMA)

Resistance levels - 129.39 (5-DMA), 129.84 (21-EMA), 130.75 (20-DMA)

Fundamental Overview:

The Japanese yen remains under pressure post-BOJ disappointment and Kuroda cautious view. Bank of Japan (BOJ) left its short-term interest rate unchanged at -0.1% and kept the 10-year government bond yields at around 0%.

BOJ Governor Haruhiko Kuroda while addressing a press conference said that the economy remained in a severe situation due to the COVID-19 pandemic and the doors are open for further accommodative monetary policy stance if such a situation arises. 

Summary: EUR/JPY has snapped at six-day bearish streak at 50% Fib retracement. The pair's major downtrend from multi-years highs at 134.12 seems to have resumed after recovery was capped at daily cloud. 

Scope for minor upticks on account of oversold conditions. Bearish invalidation only above daily cloud.