FXStreet (Mumbai) - EUR/JPY is seen wavering around 128 handle, struggling to extend the recovery beyond the last on the back of fresh buying interest around the yen over the last hours. EUR/JPY upside capped by hourly 20 & 50-SMA Currently, the EUR/JPY pair drops -0.26% to 127.98, heading for a retest of daily lows struck at 127.65 at Asia open. The cross in the EUR/JPY remains offered in early Europe as a renewed bout of risk-aversion hit markets and bolstered the demand for the safe-haven in the yen, following sharp acceleration of losses seen in the Chinese indices, with the Shanghai composite down over -4% and CSI 300 index down -3.51%. While on the other hand, the steady recovery in EUR/USD above 1.09 handle keeps the losses in EUR/JPY restricted. Looking ahead, with nothing of significance on the calendar in the European session, the sentiment on the European markets will dictate the moves in the cross. EUR/JPY Technical Levels To the upside, the next resistance lies at 128.34/37 (daily high & R1), above which it could extend gains to 129.02 (10-DMA). To the downside, the cross finds immediate support at 127.68/ 65 (daily S1/ low), below that 127/126.98 (round number/ Jan 6 Low), could act as a major support. For more information, read our latest forex news.