EURJPY extends steep fall into second consecutive day (down 1.3% durian Asian / European trading on Thursday), losing so far over 2%.
Fresh strength of Japanese yen was sparked by hawkish narrative of Japanese officials which points to faster pace of BOJ rate hikes against growing inflationary pressures, while analysts sidelined scenario about another intervention, after yen lost the most of gains from late July intervention.
Sharp drop that accelerated further on Thursday, has so far retraced the largest part of 179.36/186.02 recovery leg (over 61.8%), with target at 180.93 (Fibo 76.4%) being in focus.
Technical studies on daily chart turned to full bearish configuration, but oversold conditions suggest that bears may face increased headwinds.
Strong support provided by the top of ascending weekly Ichimoku cloud (181.70, which has already contained attack on early Aug) are expected to hold bears again for consolidation / limited correction.
Two large bearish daily candles weigh heavily on near-term action and contribute to scenario of positioning for fresh push lower, targeting 180 (psychological) and 179.36 Au 3 spike low).
Upticks should be ideally capped under 182.70 zone (broken Fibo 50%) to keep bears in play.
Res: 181.90; 182.70; 183.48; 184.26
Sup: 181.30; 180.93; 180.00; 179.36
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