Refer EUR/JPY chart on Trading View
- EUR/JPY has retraced from 7-week lows at 126.82, has edged above 127 handle.
- Price action has broken below daily cloud and 61.8% Fib at 127.43.
- Momentum indicators are at oversold levels which raises need for caution.
- That said. RSI shows strong weaker bias at 33 levels and sharply lower with further room for declines.
- The pair trades with a major bearish bias and we see scope for test of 78.6% Fib at 126.19.
- Violation at 78.6% Fib will see further weakness. While retrace into daily cloud could invalidate the bearish bias.
Support levels - 126.64 (June 19 low), 126.19 (78.6% Fib), 126
Resistance levels - 127.43 (61.8% Fib), 128, 128.33 (5-DMA)
Call update: Our previous call (https://www.econotimes.com/FxWirePro-EUR-JPY-Trade-Idea-1412379) has hit all targets.
Recommendation: Book partial profits at lows, trail SL to 128.35, target 126.64/ 126.20.
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -22.6986 (Neutral), while Hourly JPY Spot Index was at 93.2922 (Bullish) at 0725 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.