EUR/JPY Daily Outlook

EUR/JPY Daily Outlook

Daily Pivots: (S1) 129.83; (P) 131.20; (R1) 132.31; More

EUR/JPY's consolidation from 133.80 short term top is still in progress and deeper decline cannot be ruled out. But even in case of deep pull back, downside should be contained by 124.84 cluster support (61.8% retracement of 119.10 to 133.80 at 124.75) and bring rally resumption. We'd anticipate another rise through 133.80 towards 61.8% projection of 100.32 to 127.70 from 119.10 at 136.02

In the bigger picture, the up trend from 94.11 long term bottom is starting to lose momentum with bearish divergence condition seen in daily MACD. While further rise is still in favor for the moment, we'd probably see strong resistance between projection level at 136.02 and 61.8% retracement of 169.96 to 94.11 at 140.98 to limit upside and bring a sizeable consolidation/correction. Break of 124.84 will confirm medium term topping and target 119.10 and below. Nonetheless, considering the five wave structure of the rise from 94.11, we'd expect another medium term rally after completing the anticipated correction.