EUR/JPY gyrated lower last week with weak downside momentum. Initial bias stays mildly on the downside this week for 115.86/116.12 support zone. Decisive break there will confirm larger down trend resumption. On the upside, break of 119.03 will extend recent consolidation from 115.86 with another rise leg.

In the bigger picture, outlook remains bearish as the cross is staying well inside falling channel established since 137.49 (2018 high), as well as below falling 55 week EMA. As long as 122.87 resistance holds, the down trend form 137.49 should extend to 109.48 (2016 low). However, sustained break of 122.87 will indicate medium term bullish reversal.

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In the long term picture, EUR/JPY is staying in long term sideway pattern, established since 2000. Fall from 137.49 is seen as a falling leg inside the pattern. This falling leg would target 109.48 (2016 low). With EUR/JPY staying below 55 month EMA (now at 124.84), this is the preferred case.

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