EUR/JPY Technical Analysis: Jumps 100 pips on Italy deficit news, bull revival seen above 132.18

• The news that Italy is planning to limit its fiscal deficit to 2 percent of GDP in 2021 put a strong bid under the EUR pairs.
• The EUR/JPY has jumped 100 pips in the last few minutes, neutralizing the immediate bearish outlook, although only a break above the trendline connecting the Sept. 25 high and Oct. 1 high would revive the bullish view and open the doors to re-test of 133.11. As of writing, the trendline hurdle is located at 132.18.
• The bull breakout may happen in Europe if the 10-year Italy-German bond yield drops sharply.

Hourly chart

Spot Rate: 131.85

Daily High: 131.98

Daily Low: 130.97

Trend: Bullish above 132.18

Resistance

R1: 132.18 (trendline hurdle)

R2: 132.46 (Oct. 1 high)

R3: 133.13 (recent high)

Support

S1: 131.18 (Sept. 28 low)

S2: 130.71 (Oct. 2 low)

S3: 130.67 (trendine connecting Aug. 15 low and Sep. 9 low)