EUR/JPY jumped to as high as 121.99 last week. The development indicates completion of correction from 124.08, with three waves down to 114.84. And, whole medium term rebound from 109.20 is resuming. We’d expect further rally in near term, through 124.08 to 126.09 key resistance next.
Upside momentum in EUR/JPY is a bit unconvincing as seen in 4 hour MACD. Further rise is expected this week as long as 118.91 support holds. Above 121.99 will target 122.88 resistance. Decisive break there should send EUR/JPY through 124.08 to 126.09 key resistance next. However, break of 118.91 will turn focus back to 114.84 instead.
In the bigger picture, focus is back on 126.09 support turned resistance. Decisive break there will confirm completion of the down trend from 149.76. And in such case, rise from 109.20 is at the same degree and should target 141.04 resistance and above. Meanwhile, rejection from 126.09 and break of 114.84 will extend the fall from 149.76 through 109.20 low.
In the long term picture, medium term decline from 149.76 is seen as part of a long term sideway pattern from 88.96. We’re not seeing any sign of an established long term trend yet. Hence, we’ll be cautious on strong support at 94.11 in case of another fall. Also, there could be strong resistance at 149.76 in case of a medium term rise.
