EUR/JPY Daily Outlook

Daily Pivots: (S1) 126.26; (P) 127.41; (R1) 128.44;

EUR/JPY is still bounded in choppy trading in range of 123.69 and 131.03. We're still mildly favoring the case that rise from 115.80, which is treated as third leg of consolidation from 113.63, is completed after touching 131.02 resistance. But there is no confirmation yet. Short term outlook remains neutral for the moment. On the downside, below 123.69 will add some credence to the case that consolidation from 113.63 has completed and should bring deep decline to towards 115.80 support. On the upside, though, above 131.03 will indicate that rise from 115.88 is still in progress and will target 38.2% retracement of 169.96 to 113.63 at 135.14 next.

In the bigger picture, whole decline from 169.96 is expected to develop into a five wave sequence, with first wave completed at 147.03, second at 156.84, third at 113.63. Price actions from 113.63 is treated as the fourth wave consolidation. Having said that, upside of such consolidation is expected to be limited below 141.73 cluster resistance (50% retracement of 169.96 to 113.63 at 141.79). Break of 113.63 will confirm that whole down trend has resumed for 76.4% retracement of 88.97 to 169.96 at 108.08.