FxWirePro: Bearish divergence keeps scope for downside in EUR/JPY, good to go short on rallies

• EUR/JPY capped at 61.8% Fib, only decisive break above could see extension of upside.
   
• Euro was offered at the start of this week on the political uncertainty after German election result.
   
• Weak German IFO survey and ECB's Coeure & Draghi's less than hawkish comments also weighed.
   
• The pair is extending retreat from multi-month highs at 134.40, bias bearish.
   
• 5-DMA at 133 caps upside in the pair, break above could see minor upside.
   
• Bearish divergence on Stochs and RSI keeps scope for downside. Scope for test of 50-DMA at 130.60.

Support levels - 132 (trendline), 131.79 (nearly converged 20-DMA and 38.2% Fib retrace of 127.56 to 134.40 rally), 131 (trendline), 130.60 (50-DMA)

Resistance levels - 132.95 (4H 20-SMA), 133.08 (5-DMA), 134, 134.40 (Sept 22 high)

Recommendation: Good to go short on rallies around 132.90/133, SL: 134, TP: 132/ 131.79/ 131.20

FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -61.5777 (Neutral), while Hourly JPY Spot Index was at -0.488285 (Neutral) at 1040 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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