EUR/JPY - EUR/JPY rebounds from near 138.45 - 09/17/2014 (GMT)

• EUR/JPY moved above the upper line of the downside channel (containing the price action since April 2013) last week. After pulling back on Monday, the pair found support near 138.45 (S1) and rebounded somewhat. Since the rate is now trading above the upper bound of the aforementioned channel I would see a cautiously positive picture. The reason I am a bit mindful regarding further upside is that our momentum studies have not confirmed the price action yet. The RSI, although above 50, is pointing down, while the MACD stays below its trigger and is pointing down. A break above 139.20 (R1) is the move that would confirm a forthcoming higher high and perhaps set the stage for extensions towards the psychological line of 140.00 (R2).
• Support: 138.45 (S1), 138.25 (S2), 137.65 (S3)
• Resistance: 139.20 (R1), 140.00 (R2), 141.00 (R3)