- EUR/JPY edges higher from 7-week lows at 131.45 hit on Monday's trade.
- Price action has slipped below daily cloud and has broken below 50-DMA at 132.02.
- Technical studies are bearish and we see scope for further downside in the pair.
- Cloud base at 130.98 is immediate support, violation there will see test of 100-DMA at 130.23.
- On the flipside, 5-DMA at 130.50 is strong resistance, we see upside only on break above.
- We also note Bearish divergence on RSI and Stochs which raises scope for downside in the pair.
- On the data front, focus will be on Euro Zone GDP and inflation data for further impetus.
Support levels - 131, 130.23 (100-DMA), 129.79 (23.6% Fib retrace of 114.85 to 134.405 rally),
Resistance levels - 132.02 (50-DMA), 132.50 (5-DMA), 133, 133.49 (Oct 11 high)
Recommendation: Good to go short on rallies around 131.75, SL: 132.50, TP: 131.25/ 131/ 130.23.
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -77.63 (Bearish), while Hourly JPY Spot Index was at 80.0887 (Bullish) at 0620 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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