FxWirePro: EUR/JPY capped below 20-DMA, good to go short on rallies

• EUR/JPY rejected at highs at 124.28, remains capped below 20-DMA at 124.30.
   
• Draghi’s said that the Eurozone still needs extraordinary support from monetary policy, including the use of the ECB’s forward guidance.
   
• Euro continues to remain under pressure amid renewed Greece default concerns and downbeat German inflation figures released yesterday.
   
• Moreover, speculations surrounding the ECB’s move towards removal of the ultra-lose monetary policy add to pressure.
   
• Markets looking past solid Japanese industrial production numbers, improving risk sentiment after China factories saw steady growth supporting yen sellers.
   
• Focus now on the German retail sales, Eurozone flash CPI estimate for further direction.
   
• Technical indicators are biased lower, scope for test of 100-DMA at 120.95.
   
• Violation at 100-DMA could see further weakness, next bear target could be 119.47 (38.2% Fib of 109.20 to 125.81 rally).

Support levels - 122.55 (May 18 low), 121.89 (23.6% Fib), 120.95 (100-DMA)

Resistance levels - 124.30 (20-DMA), 124.39 (5-DMA), 126 (channel top)

Recommendation: Good to go short on rallies around 124.10/20, SL: 124.65, TP: 123.20/ 123/ 122.55

FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -50.978 (Neutral), while Hourly JPY Spot Index was at 144.503 (Bullish) at 0500 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.