The trend line in the daily chart was broken today at the 109.58 level and this led to a further move lower in the EURJPY today. The low reached 108.746 near lower channel support on the hourly chart (see hourly chart below). The subsequent correction higher over the last few hours extended to the 38.2% of the days trading range at the 109.413 level. This level – along with the broken trendline on the daily chart – will be key clues for the directional bias for the pair. Stay below and the downside can be further explored; move above and a further move higher can be anticipated.
Lookng at the 5 minute chart below, the correction higher also ran into resistance against the 100 bar MA (blue line in the chart below). This, coupled with the 38.2% retracement at the 1.09413 level, keeps the intraday bearish traders satisfied for the time being. A move above this MA line will be needed to sway trader opinion the other way.
