- EUR/JPY fails at weekly 200-SMA, resumes downside with hammer formation on weekly charts.
- Yen remians bid across the board on risk-off after Barcelona 'Terror Attack', dragging the pair lower.
- ECB minutes highlighted stronger growth but also noted that policy will need to remain expansionary for underlying inflation pressures to converge on 2%.
- Technicals on weekly charts are turning bearish. Stochs are on verge of rollover from overbought levels.
- RSI is biased lower and MACD is on verge of bearish crossover on signal line.
- Also, we note bearish divergene from price action on Stochs and RSI on daily charts which supports downside.
- Retrace into channel top at 127.40 will raise scope for test of channel base. Upside seen only on decisive break above weekly 200-SMA.
Support levels - 127.40 (channel top), 127, 124.60 (trendline)
Resistance levels - 128.22 (50-DMA), 129.00 (5-DMA), 129.76 (20-DMA), 130.54 (weekly 200-SMA)
Recommendation: Watch out for close below 127.40 for weakness.
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -92.02 (Bearish), while Hourly JPY Spot Index was at 171.601 (Bullish) at 0730 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest.
