- EUR/JPY extends weakness below 200-DMA, trades 0.20% lower on the day at 129.28 levels.
- The pair has broken strong trendline support at 129.55, raises scope for further downside.
- RSI is showing weakness below 50 levels and Stochs are biased lower.
- MACD is well below zero levels and we see -ve DMI dominance which adds downside pressure.
- Price action currently finds minor support at 38.2% Fib at 128.85, break below will accentuate weakness.
- On the flipside, break above immediate resistance at 5-DMA could see retrace till 20-DMA at 130.83.
- We see bearish invalidation only on breakout above 200-DMA.
Support levels - 129, 128.85 (38.2% Fib), 127.56 (Aug 18 low)
Resistance levels - 130.17 (5-DMA), 130.83 (20-DMA), 131
Recommendation: Good to go short on rallies around 129.30/40, SL: 130.20, TP: 129/ 128.85/ 128.
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