- EUR/JPY struggles to extend gains beyond strong trendline resistance at 127.25, has slipped lower to currently trade at 127 levels.
- Pair is struggling to hold above 127 handle, weakness in the pair below 127 levels, tests of 126 then likely.
- Yen remains supported across the board as overnight rally in the yen versus the US dollar continues, buoying other yen crosses.
- The greenback was heavily sold-off across the board on the dovish remarks by Fed Chair Yellen.
- However, weak Japanese industrial production data dampened investors’ sentiment, could restrict further yen gains.
- Japan’s industrial production dropped the most since 2011, coming in at 6.2% m/m in February, as compared to a 5.8% decline forecast by markets.
- Techs on the 4-hourly charts indicate further downside, Stochs have rolled over from overbought and RSI has started retrace from near 70 levels.
- Immediate resistance is seen at 127.17 ((50% Fib retrace of 132.287 to 122.058 fall) and then at 127.45 (trendline).
- On the downside supports are located at 126.72 (5-DMA) and further below at 126.27 (10-DMA).
Recommendation: Sell rallies around 127.10, SL: 127.50, TP: 126.70/126.20
