- Escalating geopolitical tensions between the US and N. Korea continues to weigh on investors sentiment keeping JPY supported.
- The single currency is seen gaining some momentum as markets await ECB minutes from the latest meeting.
- EUR/JPY recovered brief dip below 128 handle and is currently hovering around 5-DMA.
- The pair has shown a clear channel breakout last week, bias remains higher.
- Consolidation phase likely to extend, break above 61.8% Fib will see resumption of upside in the pair.
- Technical indicators are highly bullish, we see weekly 200-SMA at 130.65 as next bull target.
- Weakness seen only on retrace below channel top at 126.25, drag till 20-DMA at 124.88 then likely.
- Board members J.Weidmann and E.Nowotny speech will also be watched for cues.
Support levels - 128 (session low), 126.30 (channel top), 125.82 (weekly 5-SMA)
Resistance levels - 128.88 (61.8% Fib retrace of 141.05 to 109.20 fall), 129, 130.65 (weekly 200-SMA)
Recommendation: Good to go long on break above 128.88, SL: 128, TP: 129/ 130/ 130.65
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at 84.0285 (Slightly bullish), while Hourly JPY Spot Index was at -157.075 (Bearish) at 0820 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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