- Data released on Tuesday showed that Eurozone retail PMI data reflected slightly slower growth in activity in April (52.0 vs. 52.7 – driven mainly by weaker German and Italian contributions).
- Also, Eurozone retail sales rose 0.1% in Apr, weaker than forecast, and Mar data was revised lower.
- Banking woes in the Eurozone Periphery nations have made a comeback which could keep the Yen well bid.
- Technically, EUR/JPY is trading with a strong bearish bias. Scope for further downside.
- We see a bearish 'Anti Gartley' pattern on daily charts. RSI and Stochs are biased lower.
- Bollinger Bands are widening and we see 23.6% Fibo (109.205 to 125.814 rally) at 121.89 as initial bear target.
- Violation there will see drop to 100-DMA at 121 and then 200-DMA at 119.31. We see bearish invalidation on close above 20-DMA at 124.39.
- Focus now on ECB policy meeting which could provide further impetus to the pair.
Support levels: 122.55 (May 18 low), 121.89 (23.6% Fibo 109.205 to 125.814 rally), 121 (100-DMA), 119.31 (200-DMA)
Resistance levels: 124.09 (5-DMA), 124.39 (20-DMA), 125.31 (June 2 high)
TIME TREND INDEX OB/OS INDEX
1H Neutral Neutral
4H Neutral Neutral
1D Bearish Neutral
1W Neutral Neutral
Recommendation: Good to go short around 123.50 levels, SL: 124.10, TP: 123/ 122.55/ 121.90
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -42.8335 (Neutral), while Hourly JPY Spot Index was at 143.418 (Bullish) at 0245 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
