- Euro spiked after ECB’s more positive assessment of economic growth this year and the signals that an announcement on monetary policy awaits in October.
- EUR/JPY edged higher but was capped at 131 handle. The pair erased most of the ECB led gains and closed around 130 handle on Thursday.
- The major is down over 0.50% on the day and is trading around 129.71 levels at the time of writing.
- Downside finds strong support at 129.65 (trendline), downside only on break below.
- Daily cloud is also offering strong support on the downside.
- Technical studies are slightly bearish, break below 129.65 will see drag upto 127.73 (23.6% Fib retrace of 114.85 to 131.70 rally).
- On the upside, decisive close above 5-DMA could see test of 131.70 levels.
Support levels - 129, 128.48 (July 13 low), 128.05 (Aug 11 low), 127.73 (23.6% Fib retrace of 114.85 to 131.70 rally)
Resistance levels - 129.73 (50-DMA), 129.80 (20-DMA), 130.02 (5-DMA), 130.40 (Aug 18 high)
Recommendation: Good to go short on decisive break below 129.65, SL: 130.10, TP: 129/ 128.50/ 128/ 127.75.
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -8.32769 (Neutral), while Hourly JPY Spot Index was at 90.034 (Bullish) at 1040 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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