EUR/JPY Price Analysis: Broke below an up trendline, bears target 127.00 ahead of BoJ

• EUR/JPY reached a fresh weekly low at 127.99.
• A death-cross pattern in the daily chart weighs on the EUR/JPY.
• Bank of Japan: Expected to hold rates and keep its ETF purchases unchanged.

As the Asian session kicks in, the EUR/JPY is bouncing off Tuesday’s lows, is trading at 128.07, barely down 0.01%.

The market sentiment is upbeat, despite major US stocks indices closing mixed, between gainers and losers. During the Asian session, Asian futures are mixed weighed by Evergrande, the Chinese real-estate giant, which according to S&P Global Ratings, is on the brink of default.

Bank of Japan to release its monetary policy statement

Later during the Asian session, the Bank of Japan (BoJ) will release its monetary policy statement. Analysts at different institutions expect the BoJ to maintain the rates unchanged, keep its ETF purchases, and control the Yield Curve on the 10-year JGB. 

EUR/JPY daily chart

The EUR/JPY broke beneath the rising trendline from the 2021 low around January, which passes through August lows. The first support level would be the August 19 low at 127.92. A clear break of that level could pave the way for further losses. The next demand zone would be February 2, low at 126.10. A breach of that level could expose the 2021 low at 125.08.

The Relative Strength Index is at 31.63, slightly flat, but remains beneath the 50-midline and maintains the bearish bias.