EUR/JPY review: Italy's budget worries trigger double top breakdown

• The EUR has nosedived across the board in the last few minutes, courtesy of Italy's budget worries.
• The EUR/JPY has suffered a double top breakdown, could suffer deeper losses if the Italy-Germany yield spread spikes.

Currently, the EUR/JPY is trading at 131.83, having clocked a session low of 131.67.

The cross has shed more than 60 pips in the last 60 minutes and has peeped below the 200-hour moving average (MA) 132.70, all because of reports stating that Italy's 2019 budget meeting has been postponed, seemingly due to new complications in reaching agreement on the spending plans.

The renewed budget concerns could weigh on the Italian assets. The spread between the 10-year Italian government bond and its German counterpart may spike in the EUR negative manner.

It is worth noting that technical chart is already calling a deeper drop in the EUR/JPY. For instance, the breach of the ascending trendline and the double top breakdown, as seen in the hourly chart, indicates scope for a test of the 200-day MA support, currently lined up at 131.04.

Hourly chart

Resistance: 131.90 (double top neckline hurdle), 132.58 (100-hour moving average), 133.13 (Sept. 21 high)

Support: 131.38 (May 14 high), 131.04 (50-day MA), 130.87 (Aug. 30 high)