FxWirePro: EUR/JPY struggles at channel top at 126, break below 20-DMA could see further downside

• EUR/JPY struggles to break above at channel top at 126, breaks below 125 handle.
   
• JPY bulls buoyed following the release of solid inflation figures released out of Japan earlier today.
   
• Japanese inflation rises at a fastest pace since Apr 2015, headline CPI rose 0.4% year-on-year in April against a 0.2% rise in March.
   
• Markets remain risk-averse in the wake of sharp overnight declines in oil prices, adding to Yen demand.
   
• Technical indicators are slightly bearish on the day. RSI and Stochs have shown retrace from near overbought levels.
   
• 20-DMA at 124.07 is strong support, break below could see further downside.

Support levels - 124.06 (20-DMA), 123.22 (23.6% Fibo 114.85 to 125.81 rise), 122.55 (May 18 lows).

Resistance levels - 125.03 (5-DMA), 126 (channel top), 126.47 (April 27 high), 127, 128.22 (Mar 31, 2016 high).

Recommendation: Watchout for break below 20-DMA to go short, target: 123.20/ 123/ 122.55.

FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -91.806 (Bearish), while Hourly JPY Spot Index was at 140.126 (Bullish) at 0540 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.