Much volatility was seen in EUR/JPY last week and it eventually dipped to 121.44. Overall near term outlook is unchanged. Fall from 126.03 is viewed as the third leg of the consolidation pattern from 127.70 and deeper decline is expected. Below 121.44 will target 118.71 support and below. However, in that case, we'd expect downside to be contained by 117.04 (38.2% retracement of 100.32 to 127.70 at 117.24) to complete the consolidation. Above 126.03 will turn focus back to 127.70.
In the bigger picture, whole down trend from 169.96 (2008 high) has completed at 94.11 already, on bullish convergence condition in weekly MACD. Rise from there isn't finished yet and is expected to continue to 50% retracement of 169.96 to 94.11 at 132.03 next. Eventually, such rise would likely extend to 139.21 resistance and above. And, we'll stay bullish as long as 111.43 resistance turned support holds.
In the long term picture, the down trend from 169.96 is viewed as a corrective move even though it's very deep comparing to the rise from 88.96 (00 low). Strong support did happen above 88.96 and the medium term trend should have reversed. It's a bit early to judge whether rise from 94.11 would develop into an impulsive move, or a corrective move that's part of a range pattern. But in either case, a break of 139.21 resistance is expected in medium to long term.
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