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 – 129.89
As the single currency has continued trading with a firm undertone after surging to 130.77 early last week, adding credence to our bullish view that medium term rise from 109.49 low is still in progress, hence upside bias remains for this move to extend further gain to 131.50-60, then 132.00-10, however, loss of near term upward momentum should prevent sharp move beyond previous resistance at 132.33 and reckon 133.00-10 would hold from here, risk from there has increased for a correction to take place later.
On the downside, whilst initial pullback to 128.50-60 cannot be ruled out, reckon downside would be limited to previous support at 127.44 and bring another rise to aforesaid upside targets. Only a daily close below the Kijun-Sen (now at 126.59) would abort and suggest a temporary top is formed instead, bring correction to previous resistance at 125.82 and possibly towards 125.50 but downside should be limited to 125.00-10 and reckon 124.45-50 would hold from here, bring another upmove later.
Recommendation: Buy at 127.50 for 130.50 with stop below 126.50.
On the weekly chart, as the single currency has maintained a firm undertone after recent rally (a long white candlestick was formed last month), reinforcing our bullish view that the medium term rise from 109.49 low is still in progress and upside bias remains for this move to extend further gain to 131.00, then 131.50-60, however, overbought condition should limit upside to previous chart resistance at 132.33 and reckon 133.00-10 would hold from here, risk from there is seen for a retreat to take place later.
On the downside, although initial pullback to 129.00, then 128.40-50 cannot be ruled out, reckon 127.50-60 would limit downside and euro shall head north again from there to aforesaid upside targets. A drop below the Tenkan-Sen (now at 126.59) would defer and risk test of previous resistance at 125.82 (now support) but break there is needed to signal a temporary top is possibly formed, bring correction to 125.00, then towards 124.50, however, still reckon downside would be limited to 124.00 and support at 123.66 should remain intact, bring another rally in late Q3.
