- The single currency remained under pressure on downbeat German IFO surveys.
- German business expectations came in at 107.4 (vs. 107.9 expected), current assessment at 123.6 (vs. 124.8 forecasted) and business climate at 115.2 (vs. 116.0 estimated).
- According to the latest CFTC report, EUR net longs were scaled back to the lowest level since late June during the week ended on September 19.
- On the other side, yen buoyed on latest comments by Kuroda, who said it’s premature to review monetary policy and CPI shows it's clearly too early to discuss exit strategy.
- EUR/JPY down 0.48% on the day, currently trading around 133.13 levels.
- 61.8% Fib retracement of 149.787 to 109.205 fall is major resistance, and we see further upside only on break above.
- Price action has slipped below 5-DMA and now finds next major support at 132.55 (trendline resistance turned support).
- Oscillators are at overbought levels and on the verge of rollover. Break below 132.55 to see further weakness.
Support levels - 133, 132.55 (trendline), 131.68 (20-DMA), 130.44 (200W SMA)
Resistance levels - 133.70 (5-DMA), 134, 134.28 (61.8% Fib retrace of 149.787 to 109.205 fall), 135
Recommendation: Watch out for break below 132.55 to go short, target 131.68/ 131/ 130.45
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