EUR/JPY Daily Outlook

Daily Pivots: (S1) 133.79; (P) 134.47; (R1) 134.89; More.

With 4 hours MACD dragged below signal line, recovery from 132.34 should be completed. Intraday bias is flipped back to the downside and break of 132.34 low should target a test of trend line support at 131.22. Break there will target key support level at 124.35 next. On the upside, note that above 135.15 resistance will argue that fall from 139.21 has completed and will turn bias to the upside for retesting 139.21 high.

In the bigger picture, rise from 112.10 is treated as part of the consolidation in the larger down trend form 08 high of 169.96 only. Considering bearish divergence condition in daily MACD and RSI, such rise is tentatively treated as completed at 139.21 already. Break of mentioned trend line support from 112.10 will add much credence to this case. Further break of 124.35 will confirm and bring retest of 112.10 low next. Meanwhile, note that another rise cannot be ruled out for the moment. But upside should be limited by resistance zone of 50% retracement of 169.96 to 112.10 at 141.03 and 61.8% retracement at 147.85 and finally bring reversal.

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