- EUR/JPY slips lower on the day, remains depressed despite upbeat EZ core CPI surprise.
- Eurozone flash annual CPI reading came in unchanged 1.3% in July, matching the consensus forecast.
- The core figures surprised to the upside, coming in at 1.2% in July versus 1.1% expected and 1.1% booked in June.
- Yen remains bid on the back of renewed geopolitical tensions, weighing on the pair.
- On the upside, weekly 200-SMA at 130.60 is strong resistance. We see further bullishness only on break above.
- Momentum studies have turned neutral on weekly charts. But RSI still strong around 67.
- The pair is extending grind along 20-DMA which is strong support currently at 129.56. Break below 20-DMA could see short-term weakness.
Support levels - 129.55 (20-DMA), 128.88 (60.8% Fib retrace of 141.05 to 109.20 fall), 128 (July 6 lows)
Resistance levels - 129.88 (1H 20-SMA), 130.59 (weekly 200-SMA), 130.76 (July 11 high), 131
Recommendation: Good to go short on decisive break below 20-DMA at 129.55, SL: 130, TP: 128.90/ 128.
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