Weekly
• Last Candlesticks pattern: Window
• Time of formation: 24 April 2017
• Trend bias: Up
Daily
• Last Candlesticks pattern: Hammer
• Time of formation: 18 May 2017
• Trend bias: Up
EUR/JPY – 133.29
Although the single currency edged marginally higher 134.50, lack of follow through buying on break of previous resistance at 134.41 and the subsequent retreat suggest consolidation below said resistance would be seen and pullback to 132.45-50 cannot be ruled out, break there would suggest top is possibly formed, then test of previous support at 131.66 would follow, having said that, a drop below this level is needed to add credence to this view, bring correction of recent upmove to 131.00-10, then test of the lower Kumo (now at 130.87) which is likely to hold from here.
On the upside, whilst recovery to 133.60-70 cannot be ruled out, price should falter below said resistance at 134.50 and bring another retreat later. A break of said resistance at 134.50 would signal recent upmove has resumed for further 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.
Recommendation: Sell at 133.70 for 131.70 with stop below 134.70.
On the weekly chart, despite rising marginally to 134.50, lack of follow through buying on break of 134.41 and current retreat look set to formed a black candlestick this week, hence consolidation would be seen and pullback to 132.40-50, then test of the Tenkan-Sen (now at 131.94) is likely, however, break of support at 131.66 is needed to signal a temporary top is formed, bring retracement of recent rise 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.
On the upside, expect recovery to be limited to 133.60-70 and bring another retreat. Above said resistance at 134.50 would signal recent upmove from 109.49 (2016 low) has resumed and extend gain to 135.00, then 136.00-10, however, 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.
