- EUR/JPY has pared gains above the 128 handle to currently trade at 127.94.
- Markets believe the ECB is closer than ever to the QE taper after Draghi's comments.
- We have evidenced bearish divergence on RSI from price action which is attempting higher highs.
- The pair has slipped below 1H 5-SMA and we see further weakness if the pair break below major trendline support at 127.60.
- Stochs are on verge of bearish rollover from overbought levels and MACD shows fading momentum.
- Major reversal in trend only below 126.25 (major trendline resistance turned support.
Support levels - 127.70 (1H 20-SMA), 127.60 (trendline), 127
Resistance levels - 128.16 (Apr 1 2016 high), 128.88 (61.8% Fib of 141.05 to 109.20 fall), 129
Call update: Our previous call (http://www.econotimes.com/FxWirePro-EUR-JPY-spikes-past-channel-top-to-hit-multi-month-highs-at-12748-on-hawkish-comments-from-Draghi-778670) has hit targets 1&2.
Recommendation: Good to go short on break below 127.60, SL: 128, TP: 127.15/ 127/ 126.75
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at 45.0318 (Neutral), while Hourly JPY Spot Index was at -39.8729 (Neutral) at 0540 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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