Chart of the day EURJPY continues to inch higher within ascending channel as ECB looms

Short-term technical outlook on EUR/JPY

Key technical elements

• Since its 17 April 2017 low of 114.85, the EUR/JPY cross pair has accelerated to the upside as it started to evolve within a steeper medium-term ascending channel (depicted in golden brown) (see daily chart).
• The daily RSI oscillator remains positive above its corresponding support at the 46% level and still has room for further potential upside before it reaches an extreme overbought level of 79%. These observations suggest that medium-term upside momentum of price action remains intact.
• In the shorter-term, it is evolving within an ascending channel (depicted on light green) from its minor swing low area of 18 October 2017. The key short-term support now rests at 133.80 which is defined by the lower boundary of the aforementioned short-term ascending channel, 23.6% Fibonacci retracement of the recent up move from 16 October 2017 low to 25 October 2017 high & the minor swing low area of 25 October 2017 low (see hourly chart).
• The next significant short-term resistances stands at 134.60 (medium-term swing high area of 03 December 2015 & Fibonacci cluster) follow by 135.00 (psychological & 0.764 Fibonacci projection of the short-term up move from 16 Oct 2017 low to 23 Oct 2017 high projected from 24 Oct 2017 minor swing low).

Key levels (1 to 3 days)

Intermediate support: 134.06

Pivot (key support):  133.80

Resistances: 134.60, 135.00 & 135.60

Next support: 132.50/40

Conclusion

The short-term uptrend of EUR/JPY from 16 October 2017 low remains intact. Therefore as long as the 133.80 short-term pivotal support holds, it may shape another potential bullish impulsive wave sequence to towards the intermediate resistances of 134.60 follow 135.00 next in the first step.

However, failure to hold above 133.80 shall invalidate the bullish upleg scenario to trigger a corrective decline within its medium-term uptrend towards the next support at the 132.50/40 zone (the former minor swing high areas of 16/17 Oct 2017 & close to the lower boundary of the medium-term ascending channel from 17 Apr 2017 low).

Charts are from eSignal

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