EUR/JPY gains post ECB last week was halted by the daily cloud, we see scope for a drop back to around 132.10 levels.
Price action has edged back into the cloud, but strong resistance is seen by 200 DMA at 134.09, the pair has been trading in a narrow 134.21 - 133.29 range since Monday.
Falling wedge formation seen, daily Stochs are in the overbought zone, waiting for a rollover, RSI on dailies remains flat.
Multiple Dojis and spinning tops formed show traders unwilling to take the pair higher, bias is definitely lower.
The Japanese Yen also remains boosted on the day on the back of upbeat domestic fundamentals and on increased safe haven demand, indicating further downside in EUR/JPY.
However a close above 200 DMA could see the pair higher, but gains likely to be capped at 134.82, strong resistance (descending trendline).
The pair is currently trading at 133.90, we would be looking to sell any rally, raising stops to 134.90 and targeting 132.20 levels
Trade closed: target reached
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Profits booked, we have re-entered at spikes, looking for further lows