EUR/JPY Daily Outlook

Daily Pivots: (S1) 167.65; (P) 168.54; (R1) 169.17; More.

EUR/JPY's fall from 169.96 extends further to as low as 167.50 today after failing 170 psychological resistance. At this point, intraday bias remains ont he downside as long as 168.54 minor resistance holds and further decline could still be seen. Nevertheless, pull back should be contained well above 165.50 cluster support and bring another rise. Above 168.54 will turn intraday bias back to the upside to retest 170 psychological resistance again. Sustained break of 170 will encourage further rise to 61.8% projection of 130.60 to 168.93 from 151.71 at 175.40.

In the bigger picture, EUR/JPY's break of 168.93 key medium term resistance indicates multi month consolidation that started at 168.93 should have completed. Rise from 151.71 is still in progress as long as 165.50 cluster support (23.6% retracement of 151.71 to 169.66 at 165.42, 38.2% retracement of 158.60 to 169.66 at 165.43) holds. Further rally should be seen to 61.8% projection of 130.60 to 168.93 from 151.71 at 175.40 after taking out 170 psychological resistance. However, note bearish divergence conditions remains in daily MACD, arguing that upside momentum is still not convincing. Decisive break of 165.50 cluster support will argue that EUR/JPY has failed 170 psychological resistance and made a short term top and deeper decline may follow.

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