EUR/JPY falls to 2-month low as Russia attacks Ukraine
EUR/JPY falls towards 128.00
Russia invading Ukraine has sent risk sentiment plunging lower, lifting demand for safe havens such as the Japanese yen. Putin authorized a special military operation in Donbas, Ukraine triggering risk aversion across the financial markets
The EUR/JPY has tumbled 1.3% so far today and is one on the worst performing pairs. This is due to the combination of euro exposure to Russia and safe haven inflows to the Japanese yen.
Europe is heavily reliant on Russian energy, should Russia slow supply this could have a negative impact on growth in Europe and a huge economic toll. Furthermore, many European banks have high exposure to Russia.
Russia is the Eurozone’s fifth largest trading partner.
Concerns are growing that the situation in Ukraine will prompt the ECB to hold back on tightening monetary policy this year. Greek central bankers Yannis Stournaras has already called for the ECB to continue quantitative easing as the situation escalates.
These latest developments have overshadowed comments from ECB vice president Luis de Guindos who sounded more hawkish.
Broader risk sentiment is likely to remain the key driver for the pair with investors set to focus on Russia, Ukraine headlines.
Where next for EUR/JPY?
EUR/JPY has been steadily trending lower over the past 2 weeks, falling 2.7% whilst taking out the 50 and the 100 sma.
The 50 sma is crossing below the 100 sna in a bearish signal and the RSI suggests that there is more downside to come, whils it remains out of oversold territory.
Support is seen at 127.92, a level which has offered support on several occasions over the past year. A break below this level could open the door to 127.40 the December low. A break below here would be significant and could see sellers gain traction.
On the flipside, any recovery would need to be aiming for 130.00 the psychological level as well as the 50 & 100 sma. Before here some resistance could be seen around 129.40
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Products and services available depend on your location and the entity holding your account. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.
FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.
GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.
© FOREX.COM 2026