Daily Pivots: (S1) 129.25; (P) 130.03; (R1) 130.47; More…
EUR/JPY’s sharp fall and break of 129.83 minor support confirms short term topping at 131.39 on bearish divergence condition in 4 hour MACD. Intraday bias is now on the downside for 38.2% retracement of 122.39 to 131.39 at 127.95. At this point, we’d expect strong support from 127.95 to contain downside and bring rebound. But break of 131.39 is needed to confirm up trend resumption. Otherwise, more consolidative trading is expected with risk of another fall. Meanwhile, firm break of 127.5 will bring deeper decline to 125.80 resistance turned support before completing the correction.
In the bigger picture, the down trend from 149.76 (2014 high) is completed at 109.03 (2016 low). Current rally from 109.03 should be at the same degree as the fall from 149.76 to 109.03. Further rise is expected to 61.8% retracement of 149.76 to 109.03 at 134.20. Sustained break there will pave the way to key long term resistance zone at 141.04/149.76. Medium term outlook will remain bullish as long as 124.08 resistance turned support holds.
