- EUR/JPY has pared some losses and edged off lows at 114.85 to retake 115 handle, bias lower.
- The pair has broken major trendline support at 115.70 and trades in a major bear trend.
- Momentum studies are heavily bearish, but RSI and Stochs are deeply in oversold territory so some caution advised.
- Weekly charts are also heavily bearish and so we would use upticks as opportunity to go short.
- The pair is currently holding support at 61.8% Fib and break below will see further downside.
- Heightened North Korea tensions could see risk-off tone worsen as the week progresses, keeping safe-haven assets well in demand.
Support levels - 114.89 (61.8% Fib retrace of 109.205 to 124.094 rally), 114.45 (July 26, 2016 low), 114.01 (Nov 3rd 2016 low)
Resistance levels - 115.70 (5-DMA), 115.85 (trendline), 116, 116.65 (50% Fib)
TIME TREND INDEX OB/OS INDEX
1H Slightly bullish Neutral
4H Bearish Oversold
1D Bearish Oversold
1W Bearish Neutral
Call update: Our previous call (http://www.econotimes.com/FxWirePro-EUR-JPY-rejected-at-session-highs-good-to-go-short-on-rallies-644113) has hit TP1&2.
Recommendation: Bias lower, stay short. We would recommend fresh shorts on rallies around 115.20, SL: 115.70, TP: 114.90/ 114.45/ 114
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -103.765 (Bearish), while Hourly JPY Spot Index was at 121.438 (Bullish) at 0540 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
