• 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 – 134.00
Although the single currency did drop earlier this month from 133.89 to our indicated downside target at 131.70 (our short position entered at 133.70 met target at 131.70 with 200 points profit), as euro found good support at 131.17 and staged a strong rebound, suggesting early correction from 134.50 top has ended there and consolidation with upside bias is seen for retest of this level, however, break there is needed to confirm recent upmove has resumed and extend gain to 135.00, however, near term overbought condition should limit upside to 136.00-10 and reckon 136.90-00 would hold from here, price should falter well below 138.45-50 (1.618 times extension of 109.49-124.10 measuring from 114.85), risk from there has increased for a much-needed correction to take place later.
On the downside, whilst pullback to 133.50-60 cannot be ruled out, reckon the upper Kumo (now at 133.08) would limit downside and bring another rise later. Below support at 131.99 would defer and prolong choppy trading, risk weakness to 131.72 support, break there would suggest the rebound from 131.17 has ended and bring another fall towards this level but previous support at 131.40 should hold. Looking ahead, a daily close below 131.40 would signal top has been formed at 134.50, bring correction of recent upmove to the lower Kumo (now at 131.03), break there would provide confirmation, then subsequent fall to 130.40-50 would follow.
Recommendation: Short entered at 133.70 met target at 131.70 with 200 points profit and would turn long at 133.00 for 135.00 with stop below 132.00.
On the weekly chart, despite early anticipated retreat to 131.17, as renewed buying interest emerged and the single currency has staged a strong rebound, suggesting pullback from 134.50 has possibly ended there and retest of this level is likely, however, break there is needed to revive bullishness and confirm recent upmove from 109.49 (2016 low) has resumed and extend gain to 135.00, then 136.00-10 but reckon upside would be limited and 136.95-00 should hold, price should fatter below 138.45-50 (1.618 times extension of 109.49-124.10 measuring from 114.85), bring retreat later.
On the downside, expect pullback to be limited to 133.00 and bring such a rise. below 131.72 support would prolong consolidation, risk test of said support at 131.17 but only a weekly close below there would suggest a temporary top has been formed, bring retracement of recent rise to support at 131.40, break there would add credence to this view and extend further fall to 130.90-00, then 130.20-25 but reckon downside would be limited to 129.37 support and previous support at 127.56 should remain intact.