FxWirePro: EUR/JPY slumps as euro dented on concerns over Italian fiscal sector, good to go short below 200-DMA

EUR/JPY chart on Trading View used for analysis

• Concerns over the Italian fiscal sector, particularly around the recently announced 2.4% budget deficit, keep the single currency dented.
   
• The Italian 10 year bond yield gone up by more than 25% in past three trading days. German and Italian 10 year spread highest in 3 weeks.
   
• EUR/JPY trades 0.67% lower on the day, at 131.08 at the time of writing, intraday bias bearish.
   
• The pair finds strong support at 131 levels (converged 21-EMA and 200-DMA), break below to see weakness.
   
• 5-DMA is downward sloping and we see upside only on close above.

Support levels - 131 (converged 21-EMA and 200-DMA), 130.08 (55-EMA), 129.23 (May 8 low)
Resistance levels - 131.82 (5-DMA), 132

Recommendation: Good to go short on break below 200-DMA, SL: 131.85, TP: 130/ 129.25/ 129

FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -78.1734 (Neutral), while Hourly JPY Spot Index was at 2.48848 (Neutral) at 0845 GMT.

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