EUR/JPY tumbles to over 4-month low near 200-DMA important support

The EUR/JPY cross prolonged the bearish slide and dropped to over 4-month lows to test the very important 200-day SMA support near 117.60-65 band. 

Recent ECB headlines that some ECB policy makers oppose changing the central bank’s policy outlook continued weighing on the shared currency. This coupled with a fresh wave of global risk-aversion trade has been supportive for the Japanese Yen's safe-haven appeal and further collaborated to the EUR/JPY pair's slide to the lowest level since Nov. 22.

   •  ECB expectations overdone - ANZ

Spot traded with bearish bias for the sixth consecutive session and a follow through selling pressure now seems to pave way for additional near-term depreciating move for the cross. In absence of any major market moving economic releases, broader market risk-sentiment, which derives safe-haven demand for the Japanese Yen, would continue to be a key determinant of the pair's movement on Tuesday. 

Technical levels to watch

On a sustained break below 117.60 (200-day SMA), the cross is likely to accelerate the slide towards the 117.00 handle before eventually dropping to test 116.40-35 support area. On the flip side, any recovery back above 118.00 round figure mark now seems to face resistance near 118.40-45 horizontal level, above which a bout of short-covering could lift the cross back beyond the 119.00 handle towards tesitng its next hurdle near 119.30 region.