EUR/JPY Mid-Day Outlook

Daily Pivots: (S1) 166.61; (P) 167.13; (R1) 168.10; More.

EUR/JPY's strong rebound today and break of 168.13 minor resistance indicates that an intraday low is in place at 166.08 where fall from 1.6946 has completed. Intraday bias is flipped back to the upside for 169.46 high and then 170 psychological resistance. On the downside, while another decline cannot be ruled out, downside should be contained by 165.27/31 cluster support (38.2% retracement of 158.60 to 169.46 at 165.31 and 38.2% retracement of 151.71 to 169.46 at 165.27) and bring rally resumption.

In the bigger picture, EUR/JPY's break of 168.93 key medium term resistance indicates multi month consolidation should have completed. Sustained trading above this level will confirm that the long term up trend from 88.97 (00 low) has resumed and set the stage for further rise to next important cluster resistance at 188.22 (50% retracement of 285.56 (79 high) to 88.97 (00 low) at 187.26).

On the downside, break of 158.60 support is needed to indicate that rise from 151.71 has completed. Otherwise, further rally is still expected even in case of a deep pull back. However, in such case, it will open up a few short term bearish possibilities which could all lead to a retest of 151.71/149.27 support zone.

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