• EUR/JPY remains on the defensive around 131.50.
• Immediate contention appears at recent lows around 131.00.

EUR/JPY recorded new 3-week lows near 131.00 on Thursday. In spite of the subsequent bounce off that area, the cross remains well entrenched into the negative territory on Friday.

The loss of the 131.50 area on a sustainable basis - where recent lows and a Fibo retracement (of the October’s rally) coincide – should open the door to a deeper pullback to the 131.00 region, where is located another Fibo level at 130.97. Further south from here comes the September tops around 130.75 followed by the mid-130.00s (high September 29)

In the broader scenario, while above the 200-day SMA at 130.34, the outlook for the cross is expected to remain constructive.

EUR/JPY daily chart