Euro is extending last week's gains v/s the greenback which is inturn pushing EUR/JPY higher, the pait hit session highs at 132.23.
- Data released earlier on Monday showed that Japanese output and retail sales fell more than forecast, which was yen-bearish
- Japan's industrial output fell 1.0 pct in Nov, more than the median market forecast for a 0.6 pct drop while retail sales fell 1.0 pct y/y, more than a median market forecast for a 0.6 pct fall
- Dismal Japanese retail sales and industrial production data reinforced expectations for additional BOJ QQE as early as next month, further weighing on the Yen
- Weekly charts show more upside for the pair, strong support is seen around 130 levels, RSI is at 45 and room to run, Stochs are at neutral and show a bullish crossover
- On the dailies, price action has been pressurised below the cloud, Stochs have bounced off the 20 levels and are biased north, RSI is at 48
- Strong resistance on the upside is seen at 132.80 (cloud base), breaks into the cloud could see the pair higher, 133.23 (Dec 14 high and 61.8 % Fib of 134.59-131.03 fall) next bull target
- On the downside strong support is seen at 131.48 levels, breaks below could take the pair to 131.03 (Dec 18 low)
Recommendation: Good to buy dips around 132 levels, SL: 131.50, TP1: 132.40, TP2: 132.80
