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• The loss in the EUR/JPY currency pair may indicate a bearish shift, with a close below the Ichimoku Cloud formation signaling a further downtrend.
• Support levels include the 159.50 mark and the Tenkan-Sen formation at 157.62, with significant downside risk seen at the Kijun Sen pattern at 156.64.
• For a bullish reversal, the EUR/JPY pair needs to stay above the Senkou Span B formation at 158.71, targeting the levels of 159.00 and 160.18.

The euro appeared to be at the brink of turning decisively bearish against the Japanese yen, printing losses of 0.44% on Friday, though it looked set to finish the week with 0.26% gains. Nevertheless, as price action cracked inside the Ichimoku Cloud (Kumo) formation, sellers pressured the pair. The EUR/JPY currency pair was recently seen trading at 158.61, after hitting a high of 159.57.

As mentioned above, EUR/JPY bears appeared to be gathering momentum, which could extend if they reclaim the Dec. 19 swing high of 159.57, which could pave the way for breaking the next support seen at the 159.50 area. In such an outcome, the cross-pair could plunge sharply and challenge the Tenkan-Sen formation at 157.62, followed by the Senkou Span A at 157.14. Further downside was seen at the Kijun Sen structure at 156.64.

On the flip side, if buyers' momentum increases, and they keep the EUR/JPY pair above the Senkou Span B formation at 158.71, that could sponsor a move toward the 159.00 mark. Once broken, the next resistance level would be the Jan. 11 high at 160.18.

EUR/JPY Price Action – Daily Chart

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EUR/JPY Technical Levels

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