EUR/JPY Mid-Day Outlook

Daily Pivots: (S1) 156.15; (P) 157.09; (R1) 157.93; More.

EUR/JPY remains bounded in tight range above 156.25 in early US session but nevertheless, intraday bias remains on the downside as long as 158.48 minor resistance holds. Further decline is still expected to 149.27/151.71 key medium term support zone. Though, above 158.48 will indicate that an intraday low is in place. Considering mild bullish convergence condition in 4 hours MACD, a short term bottom might be in this case and stronger rebound could be seen towards 162.00 resistance.

In the bigger picture, rise from 151.71 has completed at 169.69 after failing 170 psychological resistance. The case of a long term top continues to build up with bearish divergence conditions in weekly MACD and RSI and with monthly MACD remains below signal line. Focus is now on long term rising channel support (now at 158.87). Sustained break of the channel will indicate that whole long term up trend from 88.97 (00 low) has completed too and bring deeper decline to 149.27 key medium term support for confirmation. On the upside, above 170 psychological resistance is now needed to confirm underlying momentum. Otherwise, downside risks will continue to grow.

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