- EUR/JPY fails to hold gains above 130 handle, retraces below 21-EMA as Euro extends falls on trade, Italy, data.
- The pair has retraced from new 2-week highs at 130.275, extends downside for a second straight session.
- Weak German data along with concerns that Italy may confront Europe and ask for more funds keep euro subdued.
- Further, global trade concerns have resurfaced as Trump's rhetoric has become fiercer ahead of the G-7 Summit.
- Rising expectations that the ECB could lay out a path to end its massive quantitative-easing program at their forthcoming meeting next week likely to limit further downside.
- On the weekly charts, the pair has bounced off 100W SMA with a hammer formation.
- Decisive break above 38.2% Fib at 129.54 will see test major resistance 131.20 (converged trendline and cloud bottom).
- On the flipside, close below 21-EMA at 128.95 could see some weakness.
Support levels - 128, 127.66 (23.6% Fib), 127
Resistance levels - 128.95 (converged 21-EMA and 5-DMA), 129.54 (38.2% Fib), 130
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