FxWirePro: EUR/JPY rejected at 128 handle, slips lower to hover around 5-DMA, bias bearish

• EUR/JPY has retraced from session highs at 128, hovers at 127.90 at the time of writing.
   
• The pair is recovering from lows of 126.64 (June 19), but remains below 21-EMA, bias lower.
   
• Successive spinning top formations on daily candles suggests indecision.
   
• We expect further weakness on bearish signals on technical indicators along with the above fundamental factors.
   
• Italian politics emerges as the exclusive driver for the pair’s weakness. 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 - 127.84 (5-DMA), 127, 126.69 (38.2% Fib), 126, 125.25 (major trendline)

Resistance levels - 128, 128.56 (21-EMA), 128.63 (55-EMA)

FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at 56.1667 (Neutral), while Hourly JPY Spot Index was at -64.5869 (Neutral) at 0500 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.