Daily Pivots: (S1) 132.27; (P) 132.52; (R1) 132.95; More….
EUR/JPY recovered after drawing support from 4 hour 55 EMA and intraday bias is turned neutral. At this point, we’re holding on to the view that rebound from 128.94 has completed at 133.08 already. Below 132.03 will target a test on 128.94 low. On the upside, above 133.08 will extend such rebound. But even in that case, upside will likely be limited by 61.8% retracement of 137.49 to 128.94 at 134.22.
In the bigger picture, price action from 137.49 medium term top are developing into a corrective pattern. Strong support from 55 week EMA (now at 129.91) suggests that the first leg has completed at 128.94 already. Nonetheless, break of 137.49 is needed to confirm resumption of the rise from 109.03 (2016 low). Otherwise, we’d expect more corrective range trading, with risk of another fall to 38.2% retracement of 109.03 to 137.49 at 126.61 before completion.
