EUR/JPY Candlesticks and Ichimoku Analysis

Weekly
    •    Last Candlesticks pattern: Hammer
    •    Time of formation: 19 Sep 2016
    •    Trend bias: Down

Daily
    •    Last Candlesticks pattern: Doji
    •    Time of formation: 28 Mar 2017
    •    Trend bias: Near term up



EUR/JPY – 123.12




As the single currency has eased after rising to 124.55 late last week, suggesting minor consolidation below this level would be seen and pullback to 122.95-00 cannot be ruled out, however, reckon downside would be limited to 122.30-35 and bring another rise later, above said resistance at 124.55 would extend early upmove from 109.49 low for headway to 125.00 and then 125.25-30 (50% Fibonacci retracement of 141.06-109.49) but reckon upside would be limited to 125.90-00, risk from there is seen for a retreat to take place soon due to overbought condition. 

On the downside, whilst initial pullback to 122.90-00 cannot be ruled out, reckon downside would be limited to 122.30-35 and bring another upmove later to aforesaid upside targets. Below previous resistance at 121.98 would defer and suggest a temporary top is possibly formed, risk correction to 121.35-40 and then 121.00, however, reckon support at 120.60 would contain weakness and bring another rise later. Only a drop below support at 120.60 would confirm top formation, bring correction of recent upmove to 120.00 but downside should be limited to the Kijun-Sen (now at 119.70) and price should stay well above indicated support at 118.92, bring rebound later. 

Recommendation: Buy at 122.00 for 124.50 with stop below 121.00.

On the weekly chart, the single currency has maintained a firm undertone after breaking previous resistance at 124.10 last week, adding credence to our view that the erratic rise from 109.49 has resumed, hence bullishness remains for this move to bring retracement of medium term downtrend to 124.85-90 (38.2% Fibonacci retracement of 149.79-109.49), then 125.25-30 (50% Fibonacci retracement of 141.06-109.49) but reckon upside would be limited to 126.00 and 126.45-50 would hold from here, bring retreat later.

On the downside, although initial pullback to the upper Kumo (now at 122.04) cannot be ruled out, reckon downside would be limited to 121.50 and bring another rise. Only below support at 120.60 would defer and risk weakness to 120.00 but reckon the Tenkan-Sen (now at 119.70) would limit downside and support at 118.92 should hold, bring another rebound later. A drop below 118.92 would shift risk to downside for further fall to 118.00, however, downside should be limited to previous resistance at 117.82 and bring rebound later. A weekly close below 117.82 would suggest first leg of rebound from 114.85 has ended, bring weakness to 117.00 but price should stay above 116.20-25, bring another rebound later.