- The common currency witnessed a broad based rally overnight on ECB President Draghi's hawkish comments.
- German bund yields and the US treasury yields spiked on Tuesday pushing EUR/JPY to 127.48, its highest level since April 2016.
- The pair has broken major channel top resistance at 126.20 and now we see scope for test of 61.8% Fib of 141.05 to 109.20 fall at 128.88.
- We see weakness on break below channel top at 126.25, drag till 20-DMA at 124.30 then likely.
Support levels - 127, 126.25 (channel top), 125.68 (5-DMA), 124.30 (20-DMA)
Resistance levels - 127.48 (June 27 high), 128, 128.88 (61.8% Fib)
Call update: Our previous call (http://www.econotimes.com/FxWirePro-EUR-JPY-finds-strong-support-at-20-DMA-eyes-channel-top-at-12620-773788) has hit all targets.
Recommendation: Book partial profits at highs, raise trailing stops to 126.20, hold for 127.50/ 128/ 128.80
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at 88.1813 (Slightly bullish), while Hourly JPY Spot Index was at -88.3053 (Slightly bearish) at 0515 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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