• EUR / JPY slips for the second day in a row, breaking below 129.00.
  • China’s real estate sector is deteriorating as Fantasia Holdings Group has failed to pay bond interest.
  • EUR / JPY: From a technical point of view, the pair could consolidate before resuming the downtrend.

EUR / JPY starts the Asian session off on the wrong foot, trading at 128.90, down 0.08% at the time of writing. Market sentiment is mixed, as evidenced by Asian equity futures, dividing up between winners and losers. However, the problems of the Chinese real estate sector continue to accumulate. Now Fantasia Holdings Group Co. has failed to repay a $ 205.7 million bond that was due on Monday. High beta currencies are up against the greenback in the Forex market, with the exception of the euro which is down 0.03%.

EUR / JPY price forecast: technical outlook

Daily graph

The ER / JPY is trading below the Daily Moving Averages (DMA), suggesting that the pair is in a downtrend. On Monday, the cross currency tested the confluence of a downtrend line and the DMA 50 around 129.39 but retreated aggressively below 129.00.

For EUR / JPY to resume its bearish trend, they will need a break below the first October low of 128.54. In this case, the first support would be the September and August lows around 128.00. A break of this level would expose the July 1 high at 127.49.

On the other hand, for EUR / JPY buyers, a daily breakout above 200-DMA at 129.72 is needed to regain control. If the latter is achieved, the first supply zone would be 130.00. A breakout of the latter could pave the way for further gains, but some key supply areas would be ahead. Critical resistance levels are said to be the September 29 high at 130.46, followed by 131.00.

The Relative Strength Index (RSI) is at 44, flat, suggesting that the pair may consolidate around the current level.

KEY ADDITIONAL LEVELS TO MONITOR