The EURJPY has been on pretty nice run since basing off support against the 100 day MA (blue line in the chart above). On Friday, the break was made with a move above the 38.2% of the 2012 range, channel trend line resistance at 101.32, the 200 day MA (green line at 101.74) and even the 50% of the 2012 range (at 102.76).
After consolidating in the Asian and London morning session today (see chart below), NY took the pair on another run to the upside – peaking at 103.845. There is nothing special about the high level today from what I can see. The base off good support below, however, seems to have been the catalyst from a technical perspective. From that base, the buyers muscled the market higher (see chart below).
My next target above would be the 104.43 area where there was a Friday low on May 4 and Monday high on May 7th before falling sharply. Above that 104.80 (61.8% of the 2012 range) and trend line resistance (highs from 2011 and 2012 – see chart above) at the 105.24 level would be the next targets.
On the downside, the price correction off the high has moved below the days midpoint. However, the move has been fairly brief and the price seems to be finding support buyers against that level (at 103.195). If the price can hold above this level, I still give the nod to the bulls. If the price breaks below the 100 bar MA on the 5 minute chart below (blue line), there should be more corrective selling.
If the high today reached a more meaningful technical level, I would be more anxious about the high being in place. Without reaching a key target, however, I wonder if the correction over the last few hours is just a dip to buy.
If short from above, however, I would not be super anxious about getting out. A move above the 103..56 (61.8% of the corrective move) would not be welcomed though.
If short from below, look for a break below 50% at 103.195 and then the 100 bar MA on the 5 minute chart (blue line in the chart below) to give the clue for further corrective pressure. The close from Friday at 102.82 and the 50% of the 2012 range at 102.76 will also be a key area. I would expect this area to find good support buyers though.
