EURJPY Daily Outlook

Daily Pivots: (S1) 121.49; (P) 122.31; (R1) 123.17;

As discussed before, EUR/JPY's recovery from 119.64 might have finished at 123.89 already. Intraday bias remains on cautiously on the downside for retesting 119.64 first. Break there will confirm fall resumption and should target 161.8% projection of 138.47 to 126.88 from 134.36 at 115.60 next. On the upside, above 122.78 minor resistance will delay the bearish case and bring more consolidations. But after all, we'd upside to be limited by 125.22 cluster resistance (38.2% retracement of 134.36 to 119.64 at 125.26) and bring fall resumption.

In the bigger picture, while rebound from 119.64 was stronger than expected, there is no change in the overall bearish view. Medium term rebound from 112.10, which is treated as a correction to long term down trend from 2008 high of 169.96, should have completed at 139.21 already, after multiple failure to sustain above 55 weeks EMA. Current decline is tentatively treated as resumption of the long term down trend and should target a new low below 112.10. On the upside, decisive break of 125.22 resistance is needed to be the first signal of bottoming. Otherwise, medium term outlook will remain bearish.