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 – 134.00
Although the single currency retreated after early anticipated rally to 134.38, as euro found good support at 132.26 and has rebounded, retaining our bullishness and consolidation with mild upside bias is seen for gain to 134.00 but break of indicated resistance at 134.50 is needed to confirm recent upmove has resumed and extend 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.
On the downside, whilst pullback to the Tenkan-Sen (now at 133.05) cannot be ruled out, reckon the Kijun-Sen (now at 132.78) would limit downside and bring another rise later. Only below said support at 132.26 would abort and signal top has been formed at 134.38 earlier this month, bring weakness to 132.00, then test of support 131.72. Looking ahead, a drop below 131.72 would signal the rebound from 131.17 has ended, bring weakness to 131.40, then retest of this level but still reckon downside would be limited to 130.40-50 and psychological level at 130.00 should hold from here.
Recommendation: Hold long entered at 133.00 for 135.00 with stop below 132.25.
On the weekly chart, as the single currency found renewed buying interest at 131.72 last week and the pair has rebounded again, retaining our bullish view that the pullback from 134.50 has possibly ended at 131.17, hence upside bias remains for another test of said resistance , however, break there is needed to confirm recent upmove from 109.49 (2016 low) has resumed and extend gain to 135.00, then 136.00-10 but 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.
On the downside, expect pullback to be limited to 132.90-00 and support at 132.26 should hold, bring such a rise. Below said support at 132.26 would defer and prolong consolidation, risk test of support at 131.72 but only break of indicated strong support at 131.17 would shift risk to downside and suggest a temporary top has been formed earlier at 134.50, bring retracement of recent rise to support at 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.
