EUR/JPY Weekly Outlook

EUR/JPY's decline from 169.96 accelerated sharply further to as low as 150.59 last week, meeting mentioned support zone of 149.27/151.17. From a short angle, intial bias remaisn on the downside this week as long as 154.37 minor resisetance holds and further fall should be seen towards 149.27. Above 154.37 will turn intraday outlook neutral and bring recovery but consolidation should be relatively brief as long as 157.83 resistance holds. Touching of 157.83 is needed to signal a short term bottom is finally formed.

In the bigger picture, last week's sharp fall and sustained trading below the long term rising channel added strong evidence that whole up trend from 88.97 (00 low) has completed, with bearish divergence conditions in weekly MACD and RSI and with monthly MACD remains below signal line. Focus now turns to 149.27 support and break will confirm this case and bring deeper medium term fall to 38.2% retracement of 88.97 to 169.96 at 139.02 first. On the upside, above 163.07 is needed to indicate fall from 169.96 has completed and invalidate the above view. Otherwise, medium term outlook now remains bearish.

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