Daily Pivots: (S1) 130.18; (P) 131.07; (R1) 131.64; More….
At this point, EUR/JPY’s rebound from 129.34 short term bottom should still extend higher to 38.2% retracement of 137.49 to 129.34 at 132.45. We’d be cautious on strong resistance from there to limit upside. Break of 129.34 will resume the whole decline from 137.49 to 126.61 medium term fibonacci level. Nonetheless, sustained break of 132.45 will target 61.8% retracement at 134.37 first, before resuming the fall from 137.49.
In the bigger picture, current development argues that rise from 109.03 has completed at 137.49, on bearish divergence condition in weekly MACD. Deeper fall should be seen to 38.2% retracement of 109.03 to 137.49 at 126.61 first. On the upside, break of 137.49 is needed to confirm medium term rise resumption. Otherwise, risk will now stay on the downside even in case of strong rebound.