EUR/JPY spiked higher to 186.86 last week but quickly retreated after meeting 186.31 projection level. Initial bias remains neutral this week first. As long as 182.75 support holds, further rally is in favor. Firm break of 186.86 will target 138.2% projection of 151.06 to 173.87 from 172.24 at 189.94. However, considering bearish divergence condition in D MACD, decisive break of 182.75 should indicate medium term topping and bring larger scale correction.
In the bigger picture, up trend from 114.42 (2020 low) is in progress and and met 61.8% projection of 124.37 to 175.41 from 154.77 at 186.31. Considering bearish divergence condition in D MACD, upside could be capped by 186.31 on first attempt. Still, outlook will stay bullish as long as 55 W EMA (now at 172.99) holds, even in case of deep pullback. Sustained break of 186.31 will pave the way to 78.6% projection at 194.88 next.
In the long term picture, up trend from 94.11 (2021 low) is in progress. 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.
