EURJPY: Cross Looks Heavy, Further Losses Likely

The EURJPY cross declined on Friday and was 0.3 percent lower during the London session, hovering near 128.40 as the single currency dropped due to very weak PMI numbers.

The price seems ready to test the short-term uptrend line, which is currently at 128.00 and if this support does not hold, further decline toward the medium-term trend line at 127.50 maybe possible. While the cross remains above this line, the outlook seems bullish. However, if the price drops below 127.50, the outlook could change to bearish, with the next target probably near October’ lows at 126.70.

On the other hand, the resistance seems to be at 129.00, where bulls have failed a couple of times already. If this level is taken out, the EURJPY cross could rise toward the 100-day moving average at 129.50, or possibly to the 200-day moving average, which is located near 130.00.

Today’s weak PMI data from the Eurozone should be negative for the EURJPY cross and sentiment remains bearish, therefore, any possible rallies might be closed.

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