EUR/JPY Mid-Day Outlook

Daily Pivots: (S1) 134.38; (P) 135.16; (R1) 135.97; More.

EUR/JPY's rise extends further to 136.87 so far in early US session and intraday bias remains on the upside as long as 135.50 minor support holds. Further rally is still in favor towards 139.21 high. However, we're still preferring the case that such rebound is merely a correction and hence expect upside to be limited below 139.21 and bring fall resumption. On the downside, below 135.50 will turn intraday outlook neutral first. Further break of 133.36 will indicate that rebound from 131.41 has completed and will put focus back to this low.

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 since EUR/JPY is still holding above the medium term trend line. But even in case of up trend resumption, 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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