EUR/JPY: downside favoured below 113.85 - FXStreet

Valeria Bednarik, chief analyst at FXStreet explained that the Japanese yen strengthened at the beginning of the day, as risk aversion dominate the Asian session, with the Nikkei plummeting 287 points in the first trading day of the week.

Key Quotes:

"The EUR/JPY fell down to 114.24, but pared losses with the US opening, as Wall Street traded positively. Nevertheless, the pair was unable to recover ground given the neutral stance of the common currency, holding near its daily low by the end of the day."

"The short term technical picture continues favoring the downside, as in the 1 hour chart, the price broke below its moving averages, and the 100 SMA gains bearish strength around 114.70, providing an immediate resistance, whilst technical indicators resumed their slides well below their mid-lines after correcting oversold readings."

"In the 4 hours chart, the price is developing a modestly bullish 100 SMA, while technical indicators have lost their bearish strength within negative territory, turning modestly higher, limiting chances of a downward extension. Still, a break below 113.85, the immediate support, should lead to further slides this Tuesday."