EUR/JPY short setup : FxWirePro | May 7, 2018

EUR/JPY -0.17% is extending weakness below daily cloud, extends falling spree for 8th straight session.

The pair is trading in a narrow range and technical indicators are biased lower.

The pair was rejected at 20W SMA and is edging lower from 10-week highs of 133.48.

We see formation of Gravestone Doji at highs which adds to the bearish bias.

Price has broken below channel base at 130.70 on the weekly charts.

Technical indicators on weekly charts are bearish . RSI weak below 50 levels and Stochs biased lower.

Next major bear target lies at 38.2% Fib at 128.85. On the flipside we see major resistance at 20W SMA at 132.58, bearish invalidation only on break above.

Support levels - 130, 129.19 (200W SMA ), 128.94 (March low), 128.85 (38.2% Fib)

Resistance levels - 130.95 (5-DMA), 131.36 (50-DMA), 132.58 (20W SMA )

Good to stay short on rallies around 130.50, SL: 131, TP: 130/ 129.20/ 128.85