EUR/JPY Weekly Outlook

EUR/JPY's down trend from 169.96 extended further to as low as 132.24 last week, meeting mentioned 100% projection of 169.96 to 147.03 from 156.84 at 133.91. From a short term angle, further decline is still expected as long as 139.72 resistance holds. Sustained trading below 133.91 will encourage further fall to next target of 50% retracement of 88.97 to 169.96 at 129.47. On the upside, though, above 139.72 will indicate that a short term bottom is in place and bring consolidation before staging another decline.

In the bigger picture, the sharp fall from 169.96 is still in progress and has taken out long term fibonacci level of 38.2% retracement of 88.97 to 169.96 at 139.02 without hesitation. The development so far suggests that fall from 169.96 is developing into a five wave decline and EUR/JPY is probably in the middle of it only. Medium term outlook will remain bearish as long as 147.03 support turned resistance holds and another fall is still expected even in case of correction, targeting 61.8% retracement of 88.97 to 169.96 from at 119.90.

In the long term picture, the three wave corrective structure of the up trend from 88.97 (00 low) to 169.96 suggests that it's merely a correction to the multi decade down trend from 285.56. The impulsive nature of the fall from 169.96 indicates that it's likely resuming the down trend. Hence, 61.8% retracement of 88.97 to 169.96 at 119.90 should at least be reached with odds of extending the down trend further to retest 88.97 low in the long run.

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