EUR/JPY Daily Outlook

Daily Pivots: (S1) 125.50; (P) 126.40; (R1) 127.64; More.

Choppy sideway trading continues in range of 123.69 and 131.03, With 123.69 support intact, another rise cannot be ruled out. But even in such case, the triangle pattern of consolidation from 131.03 will suggest that such rise is terminal in nature and should fail quickly after a brief break of 131.03 and reverse. Hence, upside potential should be limited. On the downside, below 123.69 will affirm the case that rise from 115.88, which is treated as third leg of consolidation from 113.63, is completed after touching 131.02 resistance. Deeper fall should then be seen to 115.88 support first.

In the bigger picture, whole decline from 169.96 is expected to develop into a five wave sequence, with first wave completed at 147.03, second at 156.84, third at 113.63. Price actions from 113.63 is treated as the fourth wave consolidation. Having said that, upside of such consolidation is expected to be limited below 141.73 cluster resistance (50% retracement of 169.96 to 113.63 at 141.79). Break of 113.63 will confirm that whole down trend has resumed for 76.4% retracement of 88.97 to 169.96 at 108.08.

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