EUR/JPY Weekly Outlook

EUR/JPY's rally from 151.71 extended to as high as 164.97 but was limited by upper trend line resisetance (now at 165.18) and retreats mildly since then. An intraday top is in place at 164.97 with 4 hours MACD staying below signal line. Hence, intial bias remains on the downside and further pull back could be seen. However, rise from 151.71 should still be in force as long as the inner rising trend line support (now at 161.88) holds. Above 163.81 will suggest that retreat from 164.97 has completed and bring rally resumption towards upper end of the medium term range near to 168.93 high.

On the downside, though, sustained trading below the mentioned trend line support will be the first signal that rise from 151.71 has completed. Break of 158.24 support (50% retracement of 151.71 to 164.97 at 158.34) will confirm this case and bring deeper decline towards the lower end of the medium term range near to 151.71.

In the bigger picture, EUR/JPY turned into sideway consolidation after medium term up trend was limited at 168.93. It's unclear whether such consolidation has completed at 151.71 already and hence firm break of 168.93 high is needed to confirm resumption of the long term up trend. Meanwhile, on the downside, below 158.24 will suggest that such consolidation is going to extend further before completion.

In the longer term picture, EUR/JPY is still staying inside long term rising channel (support at 155.64). The long term up trend from 88.97 (00 low) is probably still in force. Nevertheless, more choppy trading could be seen with EUR/JPY still staying inside range of 149.27 and 168.93 before firm break above this 168.93 high. Though, on resumption, the long term up trend is expected to target next important cluster resistance at 188.22 (50% retracement of 285.56 (79 high) to 88.97 (00 low) at 187.26). Meanwhile, firm break of 149.27 low will argue that the whole up trend form 88.97 (00 low) has completed. In such case, much deeper medium term decline would be seen to support zone of 124.15 and 140.92 first.

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