FXstreet.com (Barcelona) - With less than 2 hours to go for HSBC manufacturing PMI China at 01:45 GMT and Nikkei index up +1.60% around the 11560 level, EUR/JPY is higher by +0.92% at 124.22 last, off recent session and weekly highs at 125.00, ahead of Italian election results coming out later on by midday Monday. Headlines coming out over the weekend pointing for Kuoda as the new BoJ chief has weakened the Yen further.

Valeria Bednarik, Chief Analyst at Fxstreet.com, notes: “The pair has a daily descendant trend line coming from 127.69 this year high, around 125.40, so shorting against that level seems not a bad idea: 100 and 200 SMA’s in the hourly chart present a bearish tone, while price approaches to the lowest, currently around 124.20 and immediate support. Technical indicators strong upward momentum reflects the gap, but if price eases below that mark, could quickly reverse early gains, and filled the gap 100 pips below it,” the analyst suggests, adding: “As for bigger time frames, the upside seems limited, supporting some downside move ahead, as long as mentioned trend line remains intact,” she concludes.

Valeria sees support levels at: 124.20, 123.60 and 123.10, while resistance levels at: 124.80, 125.40 and 126.00.