EUR/JPY Daily Outlook

Daily Pivots: (S1) 104.87; (P) 105.53; (R1) 106.30;

The break of 105.12 minor support argues that rebound from 100.74 is finished at 107.67 already. In spite of the current recovery, we're slightly favoring this bearish case. Hence, we'd expect fall from 107.67 to resume sooner or later through 104.77 to retest 100.74 low. On the upside, though, above 107.67 will invalidate this immediate bearish view and bring another rise. But upside should be limited by 38.2% retracement of 123.31 to 100.74 at 109.36 to finish off the rebound.

In the bigger picture, whole down trend from 2008 high of 169.96 is still in progress and is building up downside momentum again. Sustained trading below 100 psychological level should pave the way to 100% projection of 139.21 to 105.42 from 123.31 at 89.52, which is close to 88.96 all time low. On the upside, break of 111.93 resistance is needed to be the first signal of medium term reversal. Otherwise, we'll stay bearish.

Please see the attached chart below.