EUR/JPY Price Analysis: Recovery remains elusive below 200-week SMA

• EUR/JPY licks its wounds around 15-month low, recently overcoming multi-day low.
• Clear downside break of 200-week SMA, absence of oversold RSI signal further declines.
• Previous support line from August 2021 adds to the upside filters, 50% Fibonacci retracement level lures sellers.

EUR/JPY pares daily losses around 125.00, down 0.35% intraday ahead of Monday’s European session.

In doing so, the cross-currency pair struggles to overcome the lowest levels since December 2020, marked during the early Asian session.

However, a sustained downside break of the 200-week SMA and a seven-month-long descending trend line, respectively around 125.50 and 126.80, keep EUR/JPY bears hopeful.

Also favoring the pair sellers is the absence of oversold RSI conditions, around 36.00 by the press time, as well as the bearish MACD signals.

As a result, the pair’s latest weakness has a further downside gap, till the 50% Fibonacci retracement of May 2020-21 upside, near 124.25.

In a case where EUR/JPY remains bearish past 124.25, the quote becomes vulnerable to test October 2020 swing low near 121.60.

Meanwhile, the aforementioned 200-week SMA and a seven-month-long descending trend line, near 125.50 and 126.80 in that order, will restrict the short-term upside of the EUR/JPY prices.

It should be noted, however, that the pair buyer will remain cautious until witnessing successful trading above February 2022 peak surrounding 133.15.

EUR/JPY: Weekly chart

Trend: Further weakness expected