- EUR/JPY hit highs at 133.12 on dovish BoJ minutes which showed increasing support for more monetary easing.
- Further, Kuroda stressed the need to keep the policy accommodative and said the exit from QQE will happen only after the 2 percent inflation target is achieved.
- The pair however fails to hold gains above 133 handle, slips lower to currently trade at 132.67 levels.
- We note Bearish divergence on RSI and Stochs which keeps scope for downside in the pair.
- Strong support seen at 50-DMA at 132.27, break below will see further weakness.
- Focus will now be on the final Eurozone/German PMI and Sentix investor confidence for trading impetus.
Support levels - 132.61 (5-DMA), 132.27 (50-DMA), 131.45 (Oct 30 low), 130.60 (100-DMA)
Resistance levels - 132.83 (20-DMA), 133. 133.49 (Oct 11 high)
Recommendation: Watch out for break below 50-DMA to go short, target 132/ 131.45/ 131.
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -27.8249 (Neutral), while Hourly JPY Spot Index was at -112.542 (Bearish) at 0440 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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