Technical prediction EUR-JPY next week october 8-12 2012

forex trading outlook today- Technical prediction EUR-JPY next week october 8-12 2012 : Last week's rebound indicates that pull back from 103.86 has finished at 99.63 already. Initial bias remains on the upside this week for a test on 103.86 first. Break there will confirm resumption of whole rebound from 94.11 and should target 61.8% retracement of 111.43 to 94.11 at 104.81 first. Break will target 111.43 key resistance next. On the downside, though, note that break of 101.25 will indicate that consolidation from 103.86 is going to extend with another falling leg to below 99.63. But in that case, we'd expect strong support from 97.98/99.18 support zone to contain downside and complete the consolidations.

In the bigger picture, we're favoring the case that whole down trend from 169.96 (3008) has completed at 94.11 already, on bullish convergence condition in weekly MACD. Focus is now on 111.43 key resistance level. Break will confirm this bullish case and bring further medium term rise to 123.31 and above (38.2% retracement of 169.96 to 94.11 at 123.08). And, we'd favor this bullish scenario as long as 97.98 support holds. Though, considering that EUR/JPY can't take out 55 weeks EMA decisively yet, break of 99.52 will favor another low below 94.11 instead.

In the long term picture, the down trend from 169.96 is viewed as a corrective move even though it's very deep comparing to the rise from 88.96 (00 low). It could either be a correction or part of a consolidation pattern but that's not too relevant as the range of 88.96/169.96 is so large. The relevant point is that we don't anticipate a break of 88.96 low. And hence, reversal should be around the corner.

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