FxWirePro: EUR/JPY sinks below major trendline support at 125.40, hits 1-1/2 year lows at 124.39

EUR/JPY chart on Trading View used for analysis

• EUR/JPY slumps 0.77% on the day, hits 1-1/2 year lows at 124.39, bias bearish.
   
• Risk-off trade keeps bid tone around the Japanese Yen, weighs on the cross.
   
• Final Dec manufacturing PMIs in the euro area broadly matched the preliminary readings.
   
• Technical studies support further weakness in the pair. Momentum with the bears.
   
• Next major bear target lies at 50% Fib retracement at 123.35. 
   
• On the flipside, 5-DMA is immediate resistance at 125.94. Break above 200-DMA negates bearish bias.    

Support levels - 124, 123.35 (50% Fib), 120.01 (61.8% Fib)

Resistance levels - 125.40 (trendline), 125.95 (5-DMA), 127.15 (21-EMA)

Recommendation: Good to stay short on rallies around 124.60/75, SL: 125.50, TP: 124/ 123.35

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.