EUR/JPY Weekly Outlook

EUR/JPY's fall from 126.24 extended further to as low as 115.88 but failed to sustain below 116.47 support decisively. Friday's recovery, with 4 hours MACD staying above signal line, argues that an intraday low is in place. Initial bias is neutral this week and some consolidation could be seen. Nevertheless, another fall is still in favor as long as 126.25 resistance holds. Below 115.88 will bring retest of 113.63 low. On the upside, though, above 126.24 will indicate that corrective fall from 131.02 has completed. Also, in such case, another rise should be seen to 131.02 or above before completing the whole consolidation from 131.02.

In the bigger picture, as discussed before, whole down trend from 169.96 is still expected to continue after completing consolidation from 113.63. Break of this low will confirm that such fall has resumed and should target 76.4% retracement of 88.97 to 169.96 at 108.08. However, note that as long as 113.63 low holds, consolidation from there might still continue. But upside is expected to be limited below 141.73 cluster resistance (50% retracement of 169.96 to 113.63 at 141.79) to complete the correction.

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. Focus now will be on whether the whole down trend from 169.96 will extend to retest 88.97 low.

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