FxWirePro: EUR/JPY hits new 2018 lows at 126.51, further downside on charts, stay short

• 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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