EUR/JPY bursts through 134.00, bear run resumes

FXStreet (Bali) - EUR/JPY is breaking lower after a period of accumulation during the Asian session, with a 135.00-134.25 range established before setting new lows sub 134.00 - lowest 133.93 - as traders continue to price in an aggressive ECB QE.

With Thursday's ECB easing package being larger than market expectations - EUR60bn/month of asset purchases - starting in March and extending until 'at least' until September 2016 as an open-ended option was mentioned as a possibiliy depending on the outlook in prices going forwards. Overall, it will represent a balance sheet expansion of EUR1.14trn, significantly larger than expectations.

Technically, the break through 134.00 paves the way fir further declines towards 133.45/50 (daily pivot support 1) ahead of 133.25 (average daily range 14) and 133.00 round number, which should attract some option-related interest/profit-taking. On the topside, 135.00 should protect sellers against intraday squeezes.