FxWirePro: EUR/JPY finds major trendline support at 127.85, good to go short on break below

EUR/JPY chart on Trading View used for analysis

• EUR/JPY is trading at 128.33, up 0.14% on the day at the time of writing.
   
• The pair has been rejected at 110-EMA and has seen a steep fall on Friday's trade as poor data overshadowed easing concerns regarding Italy's budget.
   
• A below-forecast China's retail sales, industrial production data amplified fears of a global growth slowdown. 
   
• Further, the dismal Eurozone services and manufacturing surveys further added to the malaise. 
   
• On the data calendar today we have the Eurozone trade balance and the November CPI, scheduled for release at 10:00 GMT.
   
• Europe's CPI reading early today could see broader markets take a turn for the risk-averse if inflation measures confirm traders' fears about an economic slowdown.
   
• The pair finds major support at 127.85 (Trendline), break below could see further weakness. Scope then for test of 78.6% Fib at 126.66.
   
• On the flipside, immediate resistance is seen at 5-DMA at 128.51. Bearish invalidation only on decisive breakout at 110-EMA.

Support levels - 128.04 (61.8% Fib), 127.85 (trendline), 127.61 (Dec 4 low)

Resistance levels - 128.51 (5-DMA), 128.90( 55-EMA), 129

Recommendation: Stay short on break below major trendline support at 127.85, target 127.60/ 127/126.70.

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