EUR/JPY Daily Outlook

Daily Pivots: (S1) 112.98; (P) 113.85; (R1) 114.52; More

With 4 hours MACD crossed below signal line, a temporary top is formed at 114.72 and intraday bias is turned neutral. Some consolidations would be seen first but downside should be contained above 110.00 support and bring another rise. Current rebound from 107.30 is expected to continue further and above 114.72 will target 100% projection of 107.30 to 113.36 at 110.00 at 116.06 next and possibly further to 38.2% retracement of 139.21 to 107.30 at 119.48.

In the bigger picture, fall from 139.21 is treated as resumption of long term down trend from 2007 high of 169.96 and should target 61.8% projection of 169.96 to 112.10 from 139.21 at 103.45 which is close to 100 psychological level. Though, we'd expect strong support between 2000 low of 88.96 and 100 psychological level to contain downside and bring reversal. On the upside, break of 119.64 support turned resistance, which is close to 38.2% retracement of 139.21 to 107.30 at 119.48, is needed to be the first signal of medium term reversal. Otherwise, outlook will remain bearish.