- Downbeat Japanese CPI data released earlier on the day continues to exert bearish pressure on the yen.
- EUR/JPY trades a narrow range on the day as market lacks momentum amid a lack of fundamental drivers and holiday-thinned trades.
- The pair has broken major channel base support on Friday's trade, but has held above 20-DMA support at 122.21.
- Strength in RSI seen at 61 levels with scope to run further. But Stochs and MACD are biased lower.
- Break below 20-DMA could see some downside, test of 121 levels then likely.
- Short-term bearish reversal only below 200-DMA at 118.26.
- Support levels - 122.21 (20-DMA), 122, 121.71 (Dec 20 low), 121, 120.58 (23.6% Fib of 109.20 to 124.09 rally)
- Resistance levels - 123, 123.19 (Dec 22 high), 124.09 (Dec 15 high)
Recommendation: We expect some consolidation at current levels before next leg higher. Prefer to wait for further confirmation.
FxWirePro's Hourly EUR Spot Index was at-60.1635 (Bearish), while Hourly JPY Spot Index was at 30.4316 (Neutral) at 0600 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
