EUR/JPY’s steep pullback last week confirmed short term topping at 175.03, just ahead of 175.41 high. But the cross then recovered after hitting 55 D EMA (now at 172.25). Initial bias remains neutral this week, with risk staying on the downside as long as 175.03 resistance holds. Considering bearish divergence condition in D MACD, sustained trading below 55 D EMA will indicate that whole five-wave rise from 154.77 has completed. Deeper decline should then be seen to 169.69 support next, and possibly to 38.2% retracement from 154.77 to 175.03 at 167.29.
In the bigger picture, rise from 154.77 is seen as resuming the larger up trend from 114.42 (2020 low). While initial set back could be seen as it tests 175.41 (2024 high), outlook will stay bullish as long as 55 W EMA (now at 166.48) holds. However, sustained break of the 55 W EMA will dampen this bullish case, and bring deeper fall back to 154.77 to extend the pattern from 175.41.
In the long term picture, up trend from 94.11 (2021 low) is still in progress. On resumption, next target is 138.2% projection of 94.11 to 149.76 (2014 high) from 114.42 (2020 low) at 191.32. This will remain the favored case as long as 154.77 support holds.
. Initial bias remains neutral this week, with risk staying on the downside as long as 175.03 resistance holds. Considering bearish divergence condition in D MACD, sustained trading below 55 D EMA will indicate that whole five-wave rise from 154.77 has completed. Deeper decline should then be seen to 169.69 support next, and possibly to 38.2% retracement from 154.77 to 175.03 at 167.29.){kind=link}