The EURJPY corrected yesterday and again in early trading today. Last Thursday, I outlined the case for a sell in the pair when the price was around the 136.85 level, with the 100 hour MA as one of the catalysts for the selling (see video from last week outlining bearish reasons for the EURJPY). The price did fall to a low of 135.52 on Monday, and then corrected into early today However, after testing the low from October 7, there was an additional push lower in trading today. That move sent the pair to bottom trend line support off the hourly chart and there has been a correction higher in early NY trade (low reached 135.02).
EURJPY tests resistance against the 135.52-59
The pair is correcting higher and is testing the low from Monday at the 135.52. This level is similar to the low from October 7th. If the pair can find sellers against this level, the shorts keep control, the buyers get nervous. On a move above the 1.3560 (see 38.2% of the move down today), some of the bearishness seen on the move starts to deteriorate. There may be additional momentum to the 135.77. A move above 135.80 and I start to lose interest from the short side.
Looking at the daily chart, the 135.715 level is the lows from August. In September the low reached 135.80. With the 50% of the move down today at 135.77. The low from August at 1.3571 and the low from September at 135.80, that area (between 135.71-80 is important. The break lower today should not go back above this level. If it does, there is something else going on that is putting into question the break lower..
The EURJPY broken below 135.71-80 and should now stay below.
