EUR/JPY extends slide toward last week lows as bearish pressure intensifies

• Risk aversion dominates in Wall Street and weighs on EUR/JPY. 
• Pair could post lowest daily close in two years. 

The EUR/JPY broke to the downside, falling under 123.00 after China announced countermeasures to the US, rising tariffs on US imports effective June 1. It continued to decline and recently bottomed at 122.59, the lowest level since last Thursday. 

From Friday’s close, the pair is down almost a hundred pips, having the worst performance in two weeks. If it ends the day below 122.60 it would post the lowest close since May 2017. The technical outlook continues to point to the downside and the bearish pressure intensified after the decline under 123.00. 

From a fundamental perspective, risk aversion is the main driver today. China announced it will impose tariffs on 5000 US products worth around $60 billion triggering concerns across the globe. In Wall Street, the DOW JONES is falling 2.33% and the Nasdaq declines more than 3%. Gold is up by more than $10. 

EUR/JPY Levels to watch 

To the downside, the immediate support might be seen at 122.60, followed by 122.20 (Apr 2917 high) and 122.00. To the upside, now 123.00 is the first resistance and then comes 123.35 and 123.60 (May 10 high).