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FxWirePro: EUR/JPY slumps over 0.90%, US inflation data triggers yen rally across the board

Chart - Courtesy Trading View 

Technical Analysis:

- EUR/JPY was trading 0.90% lower on the day at 136.73 at around 17:10 GMT

- The pair has paused upside at daily cloud and 55-EMA resistance

- Price action has snapped a 6-day upside and slumped lower after softer US inflation report

- GMMA indicator shows major and minor technical bias remain neutral

Data Released:

Data released by the Bureau of Labour Statistics earlier on Wednesday showed that the headline US CPI remained flat in July against the 0.2% rise anticipated. 

The yearly rate decelerated to 8.5% during the reported month, also missing estimates pointing to a fall to 8.7% from the 9.1% in June.

Further, core inflation came in at 0.3% MoM and held steady at a 5.9% YoY rate vs 0.5% and 6.1% expected, respectively.

Major Support and Resistance Levels:

Support levels - 136.68 (38.2% Fib), Resistance levels - 138.34 (55-EMA)

Summary: EUR/JPY retraces from cloud base and 55-EMA resistance. Further weakness on cards. Scope for dip till 200-DMA. Bearish invalidation only above daily cloud. 

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