EUR/JPY drops below 130.00 for the first time since September

• EUR/JPY hit 5-1/2 month low of 129.85 in Asia.
• Closed below monthly 200-MA yesterday.
• Further losses likely due to risk aversion and double top reversal on EUR/USD.

Having closed below the monthly 200-MA of 130.40 yesterday, the EUR/JPY pair fell to 129.84 in Asia - the lowest level since Sept. 8.

The Japanese Yen remains strong, courtesy of the risk aversion in the equities. The MSCI Asia Pacific is down 0.35 percent following a 380 point drop in the Dow index yesterday.  Further, the risk aversion may worsen if Fed chair Powell reiterates his upbeat take on the US economy during his appearance before the Senate (due later today).

Meanwhile, the common currency will likely remain on the back foot, given the EUR/USD pair closed yesterday below 1.2206 (Feb. 9 low), confirming a double top bearish reversal pattern.

So, the probability of EUR/JPY extending the decline is high. That said, the daily relative strength index (RSI) shows oversold conditions, so a minor corrective rally cannot be ruled out.

EUR/JPY Technical Levels

As of writing, the pair is trading at 130.02. A convincing move above 10-hour MA (moving average) of 130.11 would open doors for a corrective rally to 130.58 (resistance on the hourly chart) and 130.93 (Feb. 23 low).

On the downside, a move below the immediate support of 129.58 (200-week MA) would expose 129.24 (50-week MA) and 129.00 (psychological support).