By: Mike Kulej
All of the Euro pairs have been on a rollercoaster ride of late. The on again, off again sovereign debt fears in Europe have been playing havoc with the common currency. In case of the EUR-JPY, since early March the price rallied from 106.60 to 123.30, only to collapse about 1000 pips and set a low 113.39.
During the past two weeks or so, the EUR-JPY has been consolidating, as if waiting, unable to find direction, but now it appears to be trying to turn bullish. On the intermediate term chart, the price stopped making lower lows and lower highs. In fact, the most recent high, at 117.26 is above the previous one, a sign of possible reversal.
The EUR-JPY failed to make a new low and is ready to test the resistance established by that high. If broken, the intermediate term trend will change to bullish, with the main down trendline as its next objective at about 118.70. However, we for that we must first see the price above 117.26 on closing basis.
While there is no guarantee that the trend will indeed change, there is supportive evidence from the ADX indicator. It started to rise, suggesting a trend under development. Right now, the 117.26 is the level to watch in the EUR-JPY.