FxWirePro: Euro slumps as Eurozone investor confidence weakens more-than-expected in Oct, EUR/JPY breaks below 130 handle

EUR/JPY chart on Trading View used for analysis

• EUR/JPY slumps below 200-DMA, breaks 130 handle to hit 4-week lows at 129.93.
   
• The pair trades 0.74% lower on the day and break below 110-EMA will see further weakness.
   
• Eurozone investor confidence weakened in October as uncertainties about Italy's fiscal policy and the automobile industry in Germany weigh.
   
• The investor sentiment index fell to 11.4 in October, missing expectations at 11.8 and compared to 12.0 in September.
   
• The current situation index came in at 33.0, the lowest since April 2017, and down from 35.0 in September. Meanwhile, the expectations indicator rose to -8.3 from -8.8 in the previous month.
   
• Comments from Italy’s Deputy PM Salvini did little to ease market jitters. Salvini said he wants to change EU rules, stay in Euro.
   
• Italian 10-year bond yield rising to 3.5% for the first time since 2014, exerting some downward pressure on the EUR.
   
• Momentum studies are bearish. Stochs and RSI are sharply lower and MACD is showing a bearish crossover on signal line.
   
• Break below 110-EMA at 130.08 to see next major support at 128.87 (50% Fib). Retrace above 200-DMA negates bearish bias. 

Support levels - 129.88 (38.2% Fib), 129, 128.87 (50% Fib)

Resistance levels - 130.90 (200-DMA), 131.12 (28.6% Fib), 132

Call update: Our previous call (https://www.econotimes.com/FxWirePro-EUR-JPY-slumps-as-euro-dented-on-concerns-over-Italian-fiscal-sector-good-to-go-short-below-200-DMA-1437134) has hit TP1.

Recommendation: Book partial profits, stay short for further downside.

FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -120.737 (Bearish), while Hourly JPY Spot Index was at 188.676 (Bullish) at 0930 GMT.

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