EUR/JPY tumbles to fresh multi-month lows near mid-115.00s

Having faced rejection at the 116.00 handle, the EUR/JPY cross ran through some fresh offers and dropped to fresh multi-month lows near mid-115.00s.

Spot prolonged its sharp depreciating move and fell farther further below the very important 200-day SMA amid rising geopolitical tensions. The pair's latest leg of downslide could be attributed to comments from the N. Korean foreign minister, who said that they are ready for war if US chooses to provoke. The comments triggered a fresh wave of risk-aversion trade and boosted the Japanese Yen's safe-haven appeal.

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The Japanese Yen also benefitted from the upbeat release of industrial production and capacity utilization data, while market anxiety ahead of the French Presidential election continues to weigh on the shared currency. This combined with readjustment over ECB monetary policy expectations has resulted into the pair's sharp decline over the past six weeks. 

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Meanwhile, with world markets closed in observance of Good Friday, thin liquidity condition seems to have further aggravated the selling pressure. With today's slide, the cross has now dropped over 700-pips since mid-March but has failed to gain any respite, despite of the near-term oversold conditions. 

Technical levels to watch

A follow through selling pressure below mid-115.00s could extend the downslide to 115.15 horizontal support before the cross eventually breaks below the 115.00 mark and head towards 114.70 support area.

On the upside, recovery attempts back above 115.80 level might continue to confront resistance near the 116.00 handle, above which a bout of short-covering could lift the cross beyond 116.25 level towards its next resistance near 116.50-55 area.