EUR/JPY rejected from above 122.00, eyes July lows

• Euro ends 6-day streak against the Yen with a dramatic decline.
• EUR/JPY heads for the lowest close since June 20. 

The EUR/JPY pair is falling sharply on Friday after rising constantly during the previous six trading days. Earlier today rose to 122.20 but failed to hold on top of 122.00 and started to decline. 

In a few hours, the Euro erased days of gains, falling back below the 20-day moving average and also broke the key short-term support at 121.60. It bottomed at 121.50, also Monday’s low. The area around 121.50 has become the key short term support and a break lower would point to further losses. On the upside, 121.75 is again a resistance. If the euro rises on top it could remove the bearish pressure. 

The decline took place amid a weaker Euro across the board affected by comments from ECB officials on further easing from the central bank. At the same time, the Yen is among the top performers, even despite higher equity prices and US yields. The USD/JPY held into negative territory even after higher-than-expected PPI data from the US. 

On a weekly basis, EUR/JPY is about to post the lowest close since mid-May, marginally below the level it had a week ago after the recovery failed. The pair still remains in a wide consolidation range, now with risks tilted to the downside in the short-term, in line with the main bearish trend seen in the weekly chart.