The EURJPY has stepped down from the weeks highs on Tuesday in a nice orderly fashion. The trend move lower from the post FOMC minute highs (NOTE how the market stalled against the 100 hour MA yesterday – see blue line in the chart above), was classic. The bottom was also classic as it stalled right on the trendline rising from the 2012 lows (see daily chart below)
The correction off the trend line low today has now stalled at the 38.2% of the move down from the highs reached yesterday (at the 108.617). The move off that level keeps the shorter term downside sellers in charge. A move above the level would be needed to lead to further covering in the pair this afternoon.
If the level cannot be breached, the downside trendline may be at risk with further potential toward the 106.00 area where the 200 day MA and the 38.2% of the move up from the 2012 low is found.
