By: Colin Jessup
Since the EUR/JPY is not associated directly with the USD, it is one of the few pairs that did not move dramatically after the FOMC minutes were released in the USA. As such, it has retraced at a less dramatic rate, and done so in a the manner that was actually expected. Price was Bullish on the pair today, retracing just short of the 50% level of the day before when the JPY strengthened across the board. Price has closed at a historical level of 109.55 and fallen to about 109.21 at time of writing. While this pair has struggled to break below Support at 108.50, it has created lower highs and lower lows this week, suggesting that since Resistance at 111.00 is not being broken either after several attempts, that there is a Bearish reversal pending. Daily Support levels are 108.95, 108.38 & 107.95 while daily Resistance can be found at 109.95, 110.38 & 110.97. The Weekly R1 sits at 111.70 with Weekly S1 coming in at 107.34. I expect that if the low of 108.64 breaks we will see price fall to at least 107.75 if not 107.
Happy Trading!