The geopolitical developments of Eastern Europe have sparked negative sentiment. Russia reacted by stating that peace talks had not been able to progress.
EUR/JPY Forecast: In the near-term, the path of least resistance is downward biased.
The EUR/JPY falls in the North American session due to a mood trading session to news about Russia's - Ukraine front. This is because negotiations have stalled, as the French Foreign Minister pointed out. The EUR/JPY trades at 135.95 as of the writing.
Mid-European session: Market sentiment was dismal as Russia reported that despite Ukraine's efforts they have not seen any breakthroughs. Russia has also redeployed troops towards Donbas. The continuation of hostilities is confirmed by the statement by the Polish Deputy Prime Minister that Russia is planning a new attack on Ukraine.
The EUR/JPY overnight sawsawed in a 180pip range. The cross-currency pair hit a daily high of 136.66 in the Asian session. However, it retraced in the European session after a wave of negative sentiment struck. This lifted safe-haven peers and sent the EUR/JPY to 134.87. The North American session saw the currency gain momentum towards current levels.
EUR/JPY Forecast: Technical outlook
Indecision has been evident in the EUR/JPY pair's price action over the past two days. The EUR/JPY is stuck in the 134.00-137.00 area, despite the fact that the highs are lower than any other trading day in the past two days.
The EUR/JPY may be headed lower, but it will face some obstacles on its way. 135.30 would be the EUR/JPY's first support. A decisive break would reveal 134.87, followed closely by 133.97.
The EUR/JPY first resistance is 136.00. Brute of this would expose 136.50 followed by 137.00 and the YTD high of 137.54.