EUR/JPY Daily Outlook

Daily Pivots: (S1) 151.82; (P) 154.79; (R1) 156.32; More.

EUR/JPY's decline extends further as expected as accelerated to as low as 150.59 so far. Some support is seen as EUR/JPY entered into key medium term support zone of 149.27/151.71 as the cross turns sideway. Nevertheless, intraday bias remains on the downside for 149.27. Above 1.5437 will turn intraday outlook neutral first but recovery should be limited below 157.83 resistance and bring another fall. Above 157.83 is needed to signal a short term bottom is formed.

In the bigger picture, EUR/JPY is now sitting in key medium term support zone of 149.27/151.71. As discussed before, recent developments argues that a long term top is already in place at 169.96 after EUR/JPY failed 170 psychological level. Bearish divergence conditions in weekly MACD and RSI and with monthly MACD remains below signal line support this. This week's sharp break of long term rising channel support adds much more credence to this case. Decisive break of 149.27 support will confirm and bring deeper medium term decline to next support zone at 124.15/140.92. Note that some rebound might be seen with 55 months EMA (now at 149.79) in proximity but, above 170 psychological resistance is now needed to confirm underlying momentum. Otherwise, downside risks will continue to grow.

Subscribe to our daily and mid-day newsletter to get this report delivered to your mail box