- EUR/JPY has extended weakness to hit new 2018 lows at 126.51 before paring some losses to currently trade at 126.77.
- The major remains capped below 5-DMA and is currently extending weakness below 38.2% Fib.
- Italian political crisis drives risk-aversion across markets as traders react negatively to the unfolding political drama.
- Safe-haven demand for the Japanese yen likely to keep downside pressure intact.
- Technical analysis shows bearish bias. The pair has broken below 'Symmetric Triangle' pattern.
- Momentum indicators bearish, trend indicators support downside and we also see -ve DMI dominance which adds to the bearish bias.
- On the weekly charts the pair has broken below 110-EMA at 128.43. Next major bear target lies at 126.17 (50% Fib).
Support levels - 126.17 (50% Fib), 126, 125, 124.74 (June 27 low)
Resistance levels - 127, 127.70 (5-DMA), 128
Call update: Our previous call (https://www.econotimes.com/FxWirePro-EUR-JPY-Trade-Idea-1332757) has hit TP1/2.
Recommendation: Book partial profits at lows, hold for further downside.
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