FxWirePro: EUR/JPY weakens for the 3rd straight session, mixed German IFO provides little help

EUR/JPY chart - Trading View 

Spot Analysis:

EUR/JPY was trading 0.02% lower on the day at 132.10 at around 10:40 GMT

Previous Week's High/ Low: 133.48/ 131.98

Previous Session's High/ Low: 132.79/ 131.91

Fundamental Overview:

The shared currency remained on the sidelines following the release of mixed German IFO survey results.

The headline German IFO Business Climate Index dropped to 97.7 in October as against consensus estimates for a fall to 97.9 from 98.9 recorded in the previous month. 

The Current Economic Assessment edged lower to 100.1 from 100.4, while the IFO Expectations Index fell to 95.4 from 97.4 in September.

Technical Analysis:

- EUR/JPY has formed an 'Inverted Hammer' on the previous week's candle

- Recovery attempts capped at 5-DMA on the daily charts

- Stochs are at overbought levels, while RSI confirms a bearish rollover from overbought

- Price action is extending weakness below 200H MA

- Volatility is high as evidenced by widely separated Bollinger bands

Major Support and Resistance Levels:

Support - 131.75 (61.8% Fib), Resistance - 132.57 (5-DMA)

Summary: EUR/JPY set to extend weakness, dip till 21-EMA at 131.18 likely. Retrace and close above 200H MA negates any further downside.