- EUR/JPY extends break below 21-EMA, grinds lower along 5-DMA, bias lower.
- The major recovered from session lows at 126.64 to close at 128.49.
- The pair has resumed weakness on the day, trades 0.02% lower on the day at 127.51 levels.
- We expect further weakness on bearish signals on technical indicators along with the above fundamental factors.
- Market participants keep focus on speeches coming from the ECB forum in Portugal for further impetus.
- Next major bear target lies at 38.2% Fib at 126.69. Break below to see test of 125.25 (major trendline).
- On the upside, 55-EMA is major resistance. Bearish invalidation only on break above.
Support levels - 127, 126.69 (38.2% Fib), 126, 125.25 (major trendline)
Resistance levels - 127.98 (5-DMA), 128, 128.72 (21-EMA)
Call update: Our previous call (https://www.econotimes.com/FxWirePro-Euro-nosedives-after-dovish-ECB-taper-could-extend-drop-further-good-to-short-upticks-in-EUR-JPY-1371359) has hit all targets.
Recommendation: Book partial profits at lows. Trail SL to 128. Target 126.20/ 125.50.