Overview
The outlook for the EUR/JPY pair is unchanged for the moment. While further fall is expected, we stay cautious about the strong support from 126.09. A break of the 129.66 support turned into resistance will indicate short-term bottoming and turn bias back to the upside for the 134.58 resistance. However, a decisive break of 126.09 will extend the larger decline from 149.76. The strong rebound after failing to sustain below 38.2% retracement of 94.11 to 149.76 at 128.50 points to the development of a sideways pattern. We expect more range trading between 126.09 and 149.76 in the medium term. An upside breakout should follow it at a later stage. Nevertheless, a decisive break of 126.09 would extend the correction towards the 61.8% retracement at 115.36.
Daily Pivots: (S1) 127.09; (P) 127.63; (R1) 128.25
