• EUR/JPY corrects sharply lower and challenges 134.00.
• Further downside could see the 55-day SMA retested initially.

EUR/JPY extends the weekly leg lower and revisits the 134.00 neighbourhood on the back of the resurgence of the risk aversion in the broader markets.

The continuation of the downtrend should meet temporary support at the 55-day SMA and the 100-day SMA at 133.87 and 132.27, respectively, in the short-term horizon. Down from here emerges the always relevant 200-day SMA, today at 131.00.

In the meantime, while above the 200-day SMA, the outlook for the cross is expected to remain constructive.

EUR/JPY daily chart