EUR/JPY dips below the 200-day MA ahead of the BOJ

• The EUR/JPY is on the back foot as it fell below the 200-day moving average (MA).
• But, the recent trading range, defined by the 50% Fib and 38.2% Fib is still intact.
• All eyes are on the Bank of Japan (BOJ) rate decision.

The common currency took a beating on Thursday, courtesy of Draghi's cautious stance on the economy and the lack of confidence in Eurozone inflation.

The EUR/JPY fell from 133.26 to 133.29 yesterday and closed below the key 200-day moving average (MA) support of 132.32. As of writing, the cross is flat-lined around the 200-day MA, but still stuck in the recent trading range of 132.21 (38.2 percent Fibonacci retracement of Feb-Mar drop) and 133.225 (50 percent Fibonacci retracement of Feb-Mar drop).

The mixed Japanese data released earlier today has not had a big impact on the pair.  Japanese March retail sales and April core consumer price index printed well below the estimates. Meanwhile, the industrial production in March bettered estimates.

The focus now shifts to the Bank of Japan rate decision. The central bank is set to keep monetary policy steady on Friday and forecast inflation to hit its target next fiscal year. The EUR/JPY could see a downside break of the recent trading range if the Bank of Japan (BOJ) sounds a bit more hawkish/less dovish than its Eurozone counterpart.

EUR/JPY Technical Levels

A daily close below 132.21 (lower end of the trading range) would open up downside towards 131.47 (50-day moving average) and 130.52 (March 8 low). On the other hand, a move above 132.32 (200-day MA) would expose 133.225 (upper end of the trading range), above which a major hurdle is seen directly at 134.13 (Jan. 30 doji candle low).