• Last Candlesticks pattern: Window
• Time of formation: 24 April 2017
• Trend bias: Up
• Last Candlesticks pattern: Hammer
• Time of formation: 18 May 2017
• Trend bias: Up
EUR/JPY – 130.93
Although the single currency finally resumed recent upmove as the pair broke above previous resistance at 131.40, lack of follow through buying suggests minor consolidation would be seen and pullback to 130.50, then 129.95-00 cannot be ruled out, however, reckon 129.64-66 (current level of the Kijun-Sen and previous support) would limit downside. A daily close below this level would risk retreat to 129.00-10 but break of 128.45-50 is needed to signal a temporary top is possibly formed, bring weakness towards support at 127.56 which is likely to hold from here.
On the upside, above resistance at 131.71 would signal recent upmove is still in progress and may extend headway to 132.00-10, then 132.50-60, however, near term overbought condition would limit upside to 133.10-15 (61.8% projection of 122.40-131.40 measuring from 127.56) and reckon 133.50-60 would hold from here, price should falter well below 134.00-10, risk from there has increased for a retreat to take place later.
Recommendation: Stand aside for this week.
On the weekly chart, as the single currency found renewed buying interest at 127.56 and has finally resumed recent upmove, adding credence to our bullish view that the erratic upmove from 109.49 (2016 low) is still in progress, hence upside bias remains for this move to extend headway to previous chart resistance at 132.33, however, overbought condition should limit upside to 133.10-15 (61.8% projection of 122.40-131.40 measuring from 127.56) and price should falter well below 134.40 (61.8% Fibonacci retracement of entire fall from 149.79-109.49), risk from there is seen for a retreat to take place later.
On the downside, whilst initial pullback to 130.00-10, then the Tenkan-Sen (now at 129.64) cannot be ruled out, reckon 129.66 support would limit downside and bring another rise later. Below 129.00-10 would bring test of 128.45-50 but break of latter level is needed to suggest a temporary top is possibly formed, bring weakness towards support at 127.56 which is likely to hold on first testing. Only a drop below this level would provide confirmation, bring retracement of recent upmove to 126.70-80, then towards 126.00-10 but previous resistance at 125.81 should turn into support and limit euro’s downside.