FxWirePro: EUR/JPY edges higher from 7-week lows at 126.82, bias lower, bears target 78.6% Fib

Refer EUR/JPY chart on Trading View

• EUR/JPY has retraced from 7-week lows at 126.82, has edged above 127 handle.
   
• Price action has broken below daily cloud and 61.8% Fib at 127.43.
   
• Momentum indicators are at oversold levels which raises need for caution. 
   
• That said. RSI shows strong weaker bias at 33 levels and sharply lower with further room for declines.
   
• The pair trades with a major bearish bias and we see scope for test of 78.6% Fib at 126.19.
   
• Violation at 78.6% Fib will see further weakness. While retrace into daily cloud could invalidate the bearish bias.

Support levels - 126.64 (June 19 low), 126.19 (78.6% Fib), 126

Resistance levels - 127.43 (61.8% Fib), 128, 128.33 (5-DMA)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-EUR-JPY-Trade-Idea-1412379) has hit all targets.

Recommendation: Book partial profits at lows, trail SL to 128.35, target 126.64/ 126.20.

FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -22.6986 (Neutral), while Hourly JPY Spot Index was at 93.2922 (Bullish) at 0725 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.