The EURJPY has moved back higher in the last few hours on the back of a rumored report that the BOJ had room for further stimulus. The pair pushed off of bull flag support on the hourly chart (see chart above) and extended above the top trendline in the process. The early asian high at the 110.91 was also breached. Traders – looking for a break – will now be looking for the price to move to and through the high from last week at the 111.416. This is the highest level since October 31st 2011.
On the downside, traders will not like to see a move back below the 110.80-90 area. This represents the 38.2% to 50% of the quick move higher today (see chart below). If the trend is to continue, staying above this area would be needed. Otherwise, the waters become more murky from a technical basis.
Looking at the daily chart, the correction last week moved below the trendline support but the break could not be sustained and yesterday’s rally sent the pair back above the trendline. Connecting the recent highs in the chart have a target at 111.74.
