The rebound in the EURUSD and the steady to up USDJPY has the EURJPY surging higher. The EURJPY has trended to the upside after reaching new lows yesterday going back to November 2000. When the price could not make new lows in today’s trading and the EURUSD got it’s boost, it opened the door for a correction to start in the EURJPY.
The move has taken the pair to the 100 hour MA . The price has not closed above this moving average since July 18th. That moving average comes in at the 95.21. The level also corresponds with the high from Monday afternoon. Needless to say, get above this level and the bulls take back more control. So far, no good. Sellers have kept the price below the key resistance level.
What about the downside correction? Where should there be support keeping the potential open for another look at the high?
The 38.2% of the trend move up today comes in at the 94.80 level. The 100 bar MA on the 5 minute chart comes in at the same level (blue line in the chart below). Holding this level on the correction will be a sign the buyers are feeling good. A move below the 94.67 today (50% of the move higher,) muddies the water a bit for the pair.
The EURJPY has gone a long way. Is there room for a correction higher? Sure. Does that move involve the EURUSD moving higher or the USDJPY moving higher? Either of them could be a catalyst. The USDJPY is trading just below what was ceiling levels from Nov-Jan at 78.29. A move above that level might be enough to kick start more of a correction in the USDJPY which cuold help the EURJPY in the process (and a break of the 100 hour MA too).
