Daily cloud limits EUR/JPY bulls, pair could test 132.13

EUR/JPY gains post ECB last week was halted by the daily cloud, the pair has hit lows of 133.44 on the day, after rejection at cloud base by 134.12

There is good scope for a drop back to converged tenkan & kijun lines at 132.13, further weakness cloud expose 131.50 levels

Correction lower on charts, RSI points south, daily Stochs have shown bearish crossover from overbought levels

Immediate resistance is seen at 134.12 (cloud base), while support is located at 133.32 (Dec 4 lows) and then at 132.13 (Tenkan & Kijun-Sen)

We recommend selling rallies in the pair around 134 levels, placing stops at 134.60 and targeting 132.20 levels

Resistance Levels:

R1: 134.00 (Hourly High Dec 7)

R2: 134.13 (Daily Cloud Base)

R3: 134.58 (Daily High Dec 4)

Support Levels:

S1: 133.32 (Dec 4 lows)

S2: 132.13 (Tenkan & Kijun-Sen)

S3: 131.89 (30-Day MA)