FxWirePro: EUR/JPY extends weakness below cloud, eyes 78.6% Fib at 126.44, stay short

EUR/JPY chart on Trading View used for analysis

• EUR/JPY trades weaker for the 5th straight session, intraday bias bearish.
   
• The ECB meeting left no room for surprises on Thursday, while the Governing Council reiterated the positive view of the economic conditions in the region.
   
• The central bank showed optimism that inflation should reach the bank’s target over the medium term.
   
• Developments in Italy likely to drive the pair’s price action. Today, credit rating agency S&P is expected to publish its report on the country.
   
• Technical studies support weakness in the pair. Momentum with the bears. 
   
• The pair has broken below 61.8% Fib and is on track to test 78.6% Fib at 126.44.
   
• Immediate resistance is seen at 5-DMA at 128.30. Break above cloud see upside resumption.

Call update: Our previous call (https://www.econotimes.com/FxWirePro-Euro-weakens-across-the-board-after-dismal-PMI-data-stay-short-EUR-JPY-target-618-Fib-1447982) is approaching TP2.

Recommendation: Stay short for further downside. 

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