EUR/JPY Daily Outlook

Daily Pivots: (S1) 132.73; (P) 133.04; (R1) 133.56; More.

With 4 hours MACD crossed below signal line, an intraday top should be in place in EUR/JPY and intraday bias is turned neutral for the moment. Below 131.64 will indicate that rebound from 129.02 has completed and will flip intraday bias back to the downside for retesting this low first. Break will target 127.08 key support next. On the upside, while another fall cannot be ruled out, we'd expect upside to be limited by falling trend line resistance (now at 133.68, which is close to 50% retracement of 138.70 to 129.02). However, above mentioned trend line resistance will dampen this view and argue that fall from 138.70 has already completed. Focus will turn shift to 135.47 resistance instead.

In the bigger picture, we're still favoring the case that medium term rebound from 112.10 has completed at 139.21 already, with bearish divergence condition in daily MACD and RSI, after failing to sustain above 55 weeks EMA. Break of 127.08 will confirm this case and target a retest of 112.10 low next. Also that price actions from 113.63 are treated as consolidation to long term decline from 169.96 only. Break of 127.08 will also argue that such consolidation has completed and indicates that the long term down trend is resuming too. We'll hold on to the bearish view as long as 135.47 resistance holds.

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