FxWirePro: EUR/JPY attempts minor recovery from fresh Nov lows, bias lower as Italian yields elevated with government unwavering on deficit

EUR/JPY chart on Trading View used for analysis

• EUR/JPY attempts recovery from fresh November lows at 127.50, bias remains bearish.
   
• Italy draft budget expected Tuesday but the Italian government remains adamant on deficit.
   
• This may continue to weigh on the euro as Italian yields remain elevated and spread over German Bunds sits at 2013 levels.
   
• Technical studies on daily charts are bearish. Stochs have rollover from overbought levels.
   
• RSI is below 50 and biased lower and MACD is on verge of bearish crossover on signal line.
   
• Price has broken below 61.8% Fib at 127.87 and is currently attempting minor recovery. But upside lacks traction.
   
• 1H 20-SMA is strong resistance at 127.98. Decisive break above could see further gains. We see bearish invalidation only above 200-DMA. 

Support levels - 127.57 (Oct 26 low), 126.44 (78.6% Fib). 126

Resistance levels - 128, 128.65 (20-DMA), 129 (cloud base)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-EUR-JPY-rejected-at-200-DMA-good-to-go-short-on-break-below-20-DMA-1456070) is approaching final target. 

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.