EUR/JPY drops below 1-hour 100-MA

Reports that North Korea may consider a nuclear test of an unprecedented scale of the Pacific Ocean is pushing the Japanese Yen higher across the board.

EUR/JPY fell below the 1-hour 100-MA and printed a session low of 133.50. Risk aversion has pushed the S&P 500 futures down by 0.30%. The 10-year Treasury yield is down 2.6 basis points [bps]. European indices are set to open on a weak note as well. Consequently, the Japanese Yen is likely to remain bid.

The bearish move could gather pace if ECB President Draghi, during his speech at 8:00 GMT, talks down the common currency.

The EUR/JPY pair could still regain poise if the preliminary Eurozone and German manufacturing and services PMI indices beat estimates.

EUR/JPY Technical Levels

The cross currently trades at the 1-hour 100-MA level of 133.62. Breakdown of support at 133.25 [Sep 20 low on 1-hour chart] could yield a sell-off to 133.00 [zero levels] and 132.62 [1-hour 200-MA].

On the higher side, breach of hurdle at 133.83 [1-hour 50-MA] would open up upside towards 134.10 [1-hour 10-MA] and 134.39 [session high].