FxWirePro: EUR/JPY slips below 21-EMA, further weakness on cards

EUR/JPY chart - Trading View 

Spot Analysis:

EUR/JPY was trading 0.09% lower on the day at 131.30 at around 09:20 GMT.

Session High/ Low: 131.58/ 131.13

Previous Week's High/ Low: 132.91/ 131.55

Previous Session's High/ Low: 132.56/ 131.01

Fundamental Overview:

German Industrial Production unexpectedly drops by 1.1% MoM in September, suggesting that the recovery in the manufacturing sector is dwindling.

On an annualized basis, the German industrial production fell by 1.0% in September versus -8.0% expected and a 1.7% growth registered in August.

European Central Bank (ECB) Vice President Luis de Guindos said earlier today that factors behind the recent surge in inflation are of transitory nature.

He added that inflation in eurozone will decline next year, but maybe not as much as expected due to second-round effects. Comments do not bode well for the shared currency.

Technical Analysis: Bias Bearish

- EUR/JPY extends bearish streak for the 3rd straight week

- Price action has slipped below 21-EMA raising scope for further downside

- Bearish 5-DMA crossover on 20-DMA adds to the downside bias

- MACD supports downside, GMMA indicator shows near-term moving averages have turned bearish

Major Support and Resistance Levels:

Support - 130.86 (55-EMA), 130.34 (200-DMA)

Resistance - 131.61 (21-EMA), 131.86 (21-EMA)

Summary: EUR/JPY trades with a bearish technical bias. Bears eye next major support at 55-EMA at 130.86. Dip till 200-DMA at 130.34 likely on break below.