- EUR/JPY fails to break below major trendline support at 133, bounces-off to hit 134.15 on the day.
- Recovery attempts in the pair however, were capped at downward slopping 5-DMA at 134.14.
- Any further upside will be seen only on decisive break above. Scope then for test of 20-DMA at 134.47.
- Technical studies on weekly charts are turning bearish. RSI and Stochs are on verge of rollover from overbought levels.
- Breach at 133 support raises scope for further downside. Bears will then target 131.20 (38.2% Fib retrace of 122.40 to 136.63 rally).
- We expect a bearish invalidation on breakout at 20-DMA at 134.47.
Support levels - 133.38 (50-DMA), 133 (trendline), 132.90 (20W SMA), 132.05 (Dec 15 low)
Resistance levels - 134, 134.14 (5-DMA), 134.34 (5W SMA), 134.47 (20-DMA), 135
Recommendation: Watch out for break below 133 for further weakness.
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at 20.7866 (Neutral), while Hourly JPY Spot Index was at 145.755 (Bullish) at 0600 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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