EUR/JPY: weighing down EUR/USD as US stocks roll over

• EUR/JPY has been weighing on the euro's advance on the 1.18 handle and is extending its downside as stocks slide deeper into negative territory. 
• EUR/JPY dips below the rising 50-hr SMA at 129.42, 129 handle comes under threat judging by 23rd May decline and lack of support. 

EUR/JPY has developed a bearish case for a target of the rising 100-he SMA at 128.80 and previous cluster zone from the 23rd May sell-off. The tone in the cross is underpinned by today's sudden slide in US equities, where the NASDAQ is now down by one full percent, (-1.0%),  the DJIA at the lows of the day (still positive) and the S&P 500 below its own 50-hr SMA heading towards neutral.

Risk-off is elevated

AUD/JPY is leading the losses in the yen crosses, (risk barometer, in the broadest sense, Aussie moves higher alongside equities and risk appetite, while The Japanese yen generally moves in the opposite direction), the VIX is now trading at 12.93, higher by  +1.29%, and all in all, investors are cautious ahead of the G7 starting tomorrow and key risk events next week. 

EUR/JPY levels

"The market is immediately bid above 128.00/129.80 and only below here would trigger a slide back to 125.75, the last defence for the 124.62 recent low," analysts at Commerzbank argued: "Below 124.62 there is scope for a slide to the 124.08 December 2016 high. Between here and the 50% retracement at 123.40 we expect to see some profit taking. Below here would target 120.10/00." On the flipside, EUR/JPY remains above the 21-D SMA at 129.07 which is key and on the wider picture, the analysts at Commerzbank look for further gains to the 131.34/48 May highs, "and there is scope even for the 133.48 April peak".