EUR/JPY Weekly Outlook

After initial recovery to 163.09, EUR/JPY's fall from 164.97 resumed and dived further to as low as 158.60, touching 100% projection of 164.97 to 160.58 from 163.09 at 158.70. Initial bias remains on the downside this week as long as 160.42 minor resistance holds. As discussed before, break of 158.24 support (50% retracement of 151.71 to 164.97 at 158.34) will confirm that rally from 151.71 has completed bring deeper decline towards the lower end of the medium term range near to 151.71. On the upside, above 160.42 minor resistance will turn intraday outlook neutral first.

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. Though, below 158.24 support will argues that such consolidation is still in progress with at least another fall to the lower end of the medium term range before completion. However, strong rebound form 158.24, followed by break of 163.09 resistance, will leave the fall from 164.97 in corrective nature. Hence in such case, it will argue that rise from 151.1 is going to extend further to retest 168.93 high. And firm break of which will confirm the medium term up trend has resumed.

In the longer term picture, EUR/JPY is still staying inside long term rising channel (support at 156.45). 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, decisive 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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