FXStreet (Córdoba) - After moving sideways during several days, the euro dropped sharply against the yen and is about to post the lowest daily close since April. Risk aversion on Wednesday failed to boost the euro in the market ahead of the European Central Bank meeting. EUR/JPY started to decline in the Asian session and bottomed during the American session at 126.61, the lowest level since April 15. Afterward, it bounced modestly to the upside and managed to rise above 127.00. The recovery from the lows was capped at 127.30 and the pair was about to end the day below the 127.50 - 128.50 area that contains all daily closes since January 5. EUR/JPY technical outlook “The pair holds to its long-term bearish bias, and the 1-hour chart maintains the risk towards the downside, given that the technical indicators are turning back south after correcting oversold readings, while the price is far below the 100 and 200 SMAs, both converging in the 127.90 region”, wrote Valeria Bednarik, Chief Analyst at FXStreet. According to her, the key area to watch to the downside is were April lows lie, slightly above 126.00. “A break below it should lead to some panic selling, with the market then eyeing 124.40, a strong midterm static support”, concluded Bednarik. For more information, read our latest forex news.