FxWirePro: EUR/JPY weakens for the 3rd straight session, euro under pressure amid mixed PMI data

Chart - Courtesy Trading View 

Spot Analysis:

EUR/JPY was trading 0.68% lower on the day at 139.02 at around 08:40 GMT

Previous Week's High/ Low: 145.63/ 142.29

Previous Session's High/ Low: 143.70/ 138.70

Fundamental Overview:

Eurozone manufacturing sector slipped further into contraction in September, the latest manufacturing activity survey from S&P Global research showed on Friday.

The Eurozone Manufacturing purchasing managers index (PMI) fell to 48.5 in September missing expectations at 48.7 and 49.6 prior. 

The bloc’s Services PMI dropped sharply to 48.9 in September, below 49.0 expected and August’s 49.8. 

Composite PMI slipped to 48.2 in September vs. 48.2 estimated and 48.9 previous, its lowest level in 20 months.

Further, German manufacturing and services sectors’ contraction deepened in September, adding to the single currencies weakness.

German Manufacturing PMI came in 48.3 at this month vs. 48.3 expected and 49.1 prior. While Services PMI dropped from 47.7 booked previously to 45.4 in September as against the 47.2 estimated. 

Germany Composite Output Index slipped to 45.9 in September vs. 46.0 expected and August’s 46.9, a 28-month trough.

Technical Analysis:

- EUR/JPY is extending weakness for the fourth straight session

- The pair has retraced below 23.6% Fib and is testing cloud support at 138.83

- Price action has slipped below 200H MA and GMMA indicator shows bearish shift on intraday  charts

- Momentum is strongly bearish. Stochs and RSI are sharply lower, RSI is below 50 mark 

Major Support and Resistance Levels:

Support - 138.83 (Cloud top), 138.47 (110-EMA)

Resistance - 141.22 (21-EMA), 141.70 (20-DMA)

Summary: EUR/JPY trades with a bearish bias. Watch out for break below cloud top for further weakness.