FxWirePro: EUR/JPY on track to test 100-DMA at 118.55, good to short rallies

• EUR/JPY slips below 120 handle, we see scope for test of 100-DMA at 118.55.
   
• Political uncertainty in France which has pushed the French-German yield spread to four-year high weighs on the EUR.
   
• The pair remains capped below 20-DMA, price action has dipped into daily cloud.
   
• Short-term bias in the pair has turned bearish after break below 50-DMA. 
   
• Strong support at 120.58 (23.6% Fib retrace of 109.20 to 124.09 rally and Jan 18 low) has been breached.
   
• We now see test of 118.70 (trendline support) and then 118.55 (100-DMA).

TIME  TREND INDEX  OB/OS INDEX    

1H          Bearish                Oversold       
4H          Bearish                Oversold       
1D          Bearish                Neutral        
1W          Bearish               Neutral  

Support levels - 119.45 (Nov 30 low), 119, 118.70 (Trendline and Dec 5 low), 118.55 (100-DMA)

Resistance levels - 120.58 (23.6% Fib retrace of 109.20 to 124.09 rally),  120.91 (5-DMA), 121.62 (20-DMA)  

Recommendation: Good to go short on rallies around 119.80/90, SL: 120.60, TP: 119.45/ 119/ 118.70/ 118.55

FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -83.3645 (Bearish), while Hourly JPY Spot Index was at 161.074 (Highly bullish) at 0600 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.