FxWirePro: EUR/JPY rejected at 55-EMA, euro weakens as markets turn cautious ahead of ECB monetary policy decision

EUR/JPY chart on Trading View used for analysis

• The single currency is showing weakness as we head into the ECB monetary policy decision due Thursday.
   
• If the ECB strikes a bullish tone on inflation and downplays risks to growth we could see a spike in euro crosses.
   
• There has been news that the Italian government is ready to adjust measures in 2019 budget if markets react negatively to plans - "story carried by Il Messaggero".
   
• The move could boost sentiment across markets supporting the euro. Markets will keep close watch on Italy-German yield spreads for further momentum.
   
• Technically, we see strong support at daily cloud. Break below will see accentuation of weakness.
   
• On the flip side, breakout at 55-EMA will see further gains till 200-DMA. Violation there to see upside continuation.

Support levels - 128.44 (cloud base), 127.87 (61.8% Fib)

Resistance levels - 129.11 (5-DMA), 129.93 (55-EMA), 130.60 (200-DMA)

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.