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Fan Yang

EUR/JPY Topping but 137 is Key Support

In the 4H EUR/JPY chart, we can see that the pair has been consolidation between 138.90 and 141.05 since last week. As this week winds down, it looks like EUR/JPY is breaking below this range and a rising speedline from a couple of weeks ago.

EUR/JPY 4H Chart 6/12
(Click to enlarge)

The thing is the prevailing trend is bullish, so this price top might only lead to some very short-term bearish outlook .We should start looking for support in the 137 area, with risk of pushing to 136 and still be within the medium-term bullish outlook. A break below 136 however might neutralize the bullish outlook and open up further short-term downside risk towards the 133-133.10 support area. 

EUR/JPY Daily Chart 6/12
(click to enlarge)

In the daily chart we can see the medium-term bullish outlook since price rebounded from around 126. Note that around 137 there is a previous resistance pivot and the 200-day SMA, which might turn into support IF the market is indeed bullish. We noted that a break below 136 would open up 133-133.10. A break below 133 would reverse the current uptrend. 

If the current uptrend does stay intact, there is medium-term upside risk towards the 149.55 high from 2014.

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