FxWirePro: Euro weakens across the board after dismal PMI data, stay short EUR/JPY, target 61.8% Fib

EUR/JPY chart on Trading View used for analysis

• EUR/JPY extends weakness, trades 0.46% lower on the day at 128.40 at the time of writing.
   
• Euro dented across the board after eurozone PMIs missed expectations.
   
• Data released earlier today showed Eurozone flash manufacturing PMI hits 26-month lows of 52.1 in October.
   
• The composite Euro-zone flash manufacturing PMI touched a 26-month low of 52.1 in October.
   
• German manufacturing purchasing managers index (PMI) dropped sharply in October, coming in at 52.3 while services PMI also fell to five-month lows of 53.6 versus 55.9 last.
   
• Italian budgetary concerns continue to weigh on the single currency and we see further weakness into the ECB policy meeting.
   
• EUR/JPY trades with a bearish bias on the daily charts. Cloud offers support at 128.44. Break below to see further weakness.
   
• Next major support lies at 61.8% Fib at 127.87 ahead of 126.64 (June 19 low).
   
• On the flip side, we see immediate resistance at 5-DMA at 128.95. Bearish invalidation above 55-EMA at 129.89.

Support levels - 127.87 (61.8% Fib), 126.64 (June 19 low)

Resistance levels - 128.95 (5-DMA), 129.89 (55-EMA)

Recommendation: Good to stay short below daily cloud, SL: 129, TP: 128.90/ 127/ 126.65

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