- EUR/JPY extends grind lower after break below strong support at 50-DMA, bias remains bearish.
- Comments from the Chinese President Xi, who talked up the prospects of boosting the country’s trade and imports with the US triggered risk-off moods, lifting the safe-haven Yen.
- Price action rages within daily cloud, cloud base at 130.98 is immediate support.
- We note Bearish divergence on RSI and Stochs which keeps scope for further downside on break below cloud.
- Technical indicators are also bearish, RSI and Stochs are biased lower, MACD supports trend lower.
- Break below daily cloud finds next major support at 129.79 (23.6% Fib retrace of 114.85 to 134.409 rally).
Support levels - 130.98 (cloud base), 130.82 (100-DMA), 130.60 (Sept 16 low), 130, 129.79 (23.6% Fib retrace of 114.85 to 134.409 rally)
Resistance levels - 132 (5-DMA), 132.30 (50-DMA), 132.64 (20-DMA), 133
Call update: Our previous call (http://www.econotimes.com/FxWirePro-EUR-JPY-fails-to-hold-above-133-handle-bearish-divergence-keeps-) has hit TP1/2
Recommendation: Book partial profits at lows. Trail stop loss to 132.30, hold for 131/ 130.80/ 130.60.
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -78.5802 (Bearish), while Hourly JPY Spot Index was at 119.513 (Bullish) at 0930 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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