EUR/JPY Technical Analysis: Nears key 38.2% Fib support with biggest single-day drop since March 22

EUR/JPY fell 0.67 percent yesterday, the biggest single-day decline since March 22, neutralizing the bullish view put forward by the falling channel breakout on April 12. 

With the shape slide, the pair has inched very close to 125.60, which is the 38.2 percent Fibonacci retracement of the rally from 123.65 to 126.81. The 38.2% and 61.8% Fib retracements are widely considered as strong technical levels by traders. 

A break below 125.60, therefore, could invite selling pressure, leading to a deeper drop to 124.78 (April 10 low). 

A close above 126.81 is needed to revive the bullish outlook.

As of writing, the pair is trading at 125.75, having clocked a session high of 125.85 earlier today. The Bank of Japan trimmed its routine purchases of long-dated bonds today, so far, the central bank's move has not had any impact on the JPY pairs. 

Daily chart

Trend: Bearish below 125.60