EUR/JPY finds resistance at 120.50, turns negative

• Euro loses momentum near the 120.50 area versus the Japanese yen. 
• Wall Street turns negative, US yields further lower, weighing on the EUR/JPY. 

The EUR/JPY pair rose earlier today to 120.49 but the area around 120.50 capped the upside and it turned to the downside. As of writing, it trades at 120.15, the lowest since the Asian session. 

The retreat from the day’s top took place amid a decline in equity prices in Wall Street that strengthened the Japanese yen. The Dow Jones is losing 0.40% after a positive opening while the Nasdaq drops 0.14%. Also, lower bond yields pushed EUR/JPY lower. The 10-year yield fell below 1.80% to the lowest since November 4. 

Volatility across majors remains low in the forex market. The kiwi and the aussie are the best performers, while the euro is showing gains versus the Swiss franc and the pound. 

Technical outlook 

The EUR/JPY is still consolidating around the 20-day moving average, but risks are now tilted to the downside in the very short-term. Price is approaching the 20 simple moving average in the four hours chart at 120.15. A break lower would expose the 120.00 area (weekly low). Below the next support is seen at 119.80. A recovery back above 120.50 would favor further gains to the euro and a test of 120.70 (weekly high).