FxWirePro: EUR/JPY recovery lacks traction, further downside on cards

EUR/JPY chart - Trading View 

Spot Analysis:

EUR/JPY was trading 0.10% higher on the day at 128.82 at around 10:40 GMT

Previous Week's High/ Low: 130.47/ 128.54

Previous Session's High/ Low: 129.49/ 128.33

Fundamental Overview:

Easing energy crisis and a potential US debt ceiling extension lift the market mood, support the pair higher.

Germany industrial output drops sharply by 4% MoM, data by the federal statistics authority Destatis showed earlier on Thursday.

On an annualized basis, the German industrial production rose by a mere 1.7% in August versus 11.4% expected and a 6% growth reported in July.

The bigger-than-expected drop in German August industrial production suggesting that the recovery in Eurozone’s economic powerhouse’s manufacturing sector losing momentum.

Technical Analysis:

- EUR/JPY is consolidating break below daily cloud, outlook is bearish

- MACD is in the negative territory and supports weakness

- GMMA indicator shows major and minor trend are strongly bearish

- Momentum is bearish and volatility is high

Major Support and Resistance Levels:

Support - 128.34 (55-week EMA), Resistance - 129.20 (21-EMA)

Summary: EUR/JPY trades with a bearish bias. Recovery lacks traction, focus on ECB monetary policy minutes for impetus. Break below 128.34 will see test of 127.95 (Channel base).