EUR/JPY Mid-Day Outlook

Daily Pivots: (S1) 132.18; (P) 133.23; (R1) 133.98; More.

EUR/JPY rebound strongly after drawing support from medium term trend line again and break of 133.22 minor resistance indicates that an intraday low is in place. Outlook is turned neutral for the moment. But after all, break of 135.15 resistance is needed to indicate that fall from 139.21 has completed. Otherwise, short term outlook will remain bearish. Below 131.41 and sustained trading below the mentioned trend line will be an important indication of medium term reversal and should bring deeper fall to next key support level at 124.35.

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.

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