- EUR/JPY has resumed downside after brief consolidation, extends break below 21-EMA.
- The major is trading 0.93% lower on the day, at 127.29 at the time of writing.
- The single currency remains dented after dovish ECB taper, while JPY remains bid amid risk-off.
- U.S. President Donald Trump threatened on Monday to impose a 10 percent tariff on $200 billion of Chinese goods taking the world’s two largest economies to the brink of a full-scale trade war.
- We expect further weakness on bearish signals on technical indicators along with the above fundamental factors.
- Next major bear target lies at 38.2% Fib at 126.69. Break below to see test of 125.25 (major trendline).
- On the upside, 55-EMA is major resistance. Bearish invalidation only on break above.
Support levels - 127, 126.69 (38.2% Fib), 126, 125.25 (major trendline)
Resistance levels - 128, 128.45 (5-DMA), 128.82 (21-EMA)
Call update: Our previous call (https://www.econotimes.com/FxWirePro-Euro-nosedives-after-dovish-ECB-taper-could-extend-drop-further-good-to-short-upticks-in-EUR-JPY-1371359) has hit TP1.
Recommendation: Book partial profits at lows. Trail SL to 128.85. Hold for further weakness.
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -96.1189 (Bearish), while Hourly JPY Spot Index was at 166.665 (Bullish) at 0545 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.