EUR/JPY retreats with expected pressures ahead

The EUR/JPY pair fell below the 140.00 mark as the cross dives below the 200-DMA and the 20-day crosses below the 100-DMA.

The EUR/JPY drops 2.40% below the 200-day Exponential Moving Average (EMA) at 140.18, extending its losses to three consecutive trading days, falling since peaking around the last week’s high of 142.93. the EUR/JPY pair is trading at 139.37, below its opening price, after hitting a daily high of 140.31.s

The EUR/JPY is forming a megaphone top formation, usually a bearish formation, which was confirmed once the cross-currency pair broke below the 200-day EMA. The pair’s first support would be the December low of 138.80. A breach of the latter will expose the September 26 daily low of 137.36, followed by the August 24 swing low of 135.51.

As an alternate scenario, if the EUR/JPY climbs back above the 200-day EMA, a rally toward the 20-day EMA at 142.21 is on the cards. Once cleared, it would expose the 100-day EMA at 142.43.