EURJPY:- 500 pips in a week!
EURJPY:- Since our last post the pair did break higher after retesting the previous daily region of support at 134.400 and rebound to fulfil our upside Fibonacci target region of 137.500. After making the high we did fail to push on a further 50 pips and reach the suggested upside weekly resistance of 138.000. Last week we saw an aggressive and rapid price movement as the pair retraced 500 pips in a week, with Fridays candle stick completing a 200 pip move from 134.000 - 132.000.
We are once again at this major price point in the market of 132.000 we previously stalled here for 13 weeks before making the next move and therefore we have to consider its significance in the current market. The weekly closure is holding a lot of weight and I would expect follow through momentum to occur in the later stages of this week as we may see some forms of retracement before continuing to the downside. If 132.000 can be broken I would then expect to see 130.000 and the start of a bearish cycle for the pair.
Previous:- We have seen price consolidate for the previous 8 days at 136.000 Monthly Resistance. This level seems to be a barrier in which price is finding it difficult to break above. The price has created a consolidation zone of roughly 90 pips from resistance highs to a support level of 135.100. It will need a break from the highlighted zone that will help determine the next leg of the journey for the pair. My bias is staying to the upside. Higher time frame analysis suggests that we have plenty more room to move, and the daily moving averages are being retested and spiked but are yet to be broken below with a lot of momentum remains to the upside in the pair. I would suggest to wait for a break out of either direction but favouring the upside, with the next resistance level 200 pips way there is a good opportunity for entries if 136.000 resistance can have a daily closure above.
As highlighted on the chart 138.000 could be tested in the next few days if we maintain a bullish closure from its current consolidative region.