Forex Signals: TECHNICAL ANALYSIS OF THE EURJPY 02/08/11
Last week USD / JPY fell back from the maximum short period of 114.00 and has reached a low of 110.77 before tackling the ascent.
This decrease might still continue up to 100% projection of 110.31, but in any case, we expect that the drop is limited by 109.56 support (61.8% retracement of 106.81 to 114.00 to 109.55) and may lead to the resumption of the rally.
The longer term outlook remains unchanged: the rise from 106.81 is the third leg of consolidation from 105.42 storyline.
Above, 112.90 flip intraday bias back to the upside.
A break to try to reach the 114.00 target 115.65 and 100% projection of 105.42 to 115.65 from 106.81 to 117.04.
The movement started from 105.42 is treated as consolidation of medium-term bear market started to 139.21.
The current development suggests that the ascent from 106.81 is the third leg of this consolidation and should now move towards the target of the resistance of 115.65 if not longer.
In any case, we expect strong resistance to 38.2% retracement of 139.21 to 105.42 to 118.33, a level that should limit the upside and lead to a resumption of down trend.
On the downside, below 109.56 support, the focus will shift to a minimum of 105.42.
In the long term, rising by 88.96 (minimum of 2000) was completed at 169.96 and reached a maximum long-term.
On the basis of the structure to five waves of the rise from 88.96 to 169.96, one can expect that the fall from 169.96 is remedial in nature.
It should evolve into a rebate in 3 waves with the first full wave at 112.10 and 139.21 to complete the second wave.
There is no confirmation that the third wave is terminated, and the descent could therefore still continue.
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