EUR/JPY drops to the lowest level since early Dec.

The EUR/JPY cross ran through fresh offers near session high level of 121.67 and has dropped to the lowest level since early December.

Renewed worries of 'hard Brexit' trigger a fresh wave of risk-aversion trade on Monday. This coupled with weak trading sentiment in European equity market boosted the Japanese Yen's safe-haven appeal and contributed to the pair's offered tone. 

Meanwhile, some renewed selling pressure around the EUR/USD major, as investors turn cautious ahead of this week's ECB monetary policy decision, was also seen collaborating to the pair's offered tone on Monday. 

Looking at the broader picture, the cross has broken out of nearly one-month old trading range and has also decisively broken below 23.6% Fibonacci retracement level of 112.08-123.41 up-swing, confirming a break-down. Hence, from current levels the cross seems vulnerable to extend its corrective slide in the near-term.

Technical levels to watch

A follow through selling pressure is likely to drag the cross towards 120.00 psychological mark, below which the cross is likely to drift towards an important confluence support near 118.00 handle, comprising of 200-day SMA and 50% Fibonacci retracement level. 

On the flip side, 23.6% Fibonacci retracement level near 121.25-30 region now becomes immediate resistance, which if cleared has the potential to lift the cross beyond 122.00 handle, towards its next major hurdle near 122.65-70 region.