The EUR/JPY pair rose during the Friday session as the 120 level continues offer support. This market has been extraordinarily bullish over the last several months as you know, and as a result it does not surprise me that the next major handle from the fall acted as support. I have been watching both the 120 and 115 levels for potential bounces, and according to the last couple of sessions, I believe we are about to see it now.
Looking at the candle from both Tuesday and Wednesday, it's obvious that there is a certain amount of interest in this pair at the 120 handle, and also it should be noted that the Euro is finding support at the 1.30 handle against the US dollar. Because of this, it appears that the Euro will continue to offer support for this pair as it has stopped falling as rapidly as it once was.
Remember, the Bank of Japan is actively working against the Yen, and as a result this is a matter of the Euro being "less bad”, as the Yen is going to be flawed for quite some time. Because of this, it appears that the pair will be able to continue higher, unless of course Italy absolutely drops a bombshell in the near-term.
Continuation
My entire trading plan for this particular market has been to wait for pullbacks and see some type of support in order to start buying. The thought of selling this market has not entered my mind, and certainly I do not want to be one of those multitudes of traders out there who have tried to fade this "ridiculous rally."
Looking at this chart, I think that a move back up to the 125 handle is likely. You have to keep in mind that the jobs number comes out of the United States on Friday, sell this market will be somewhat subdued going forward, but I think a slow grind higher is definitely within this pair's reach. As for selling, I wouldn't do so and if we do get weakness at this point time, I believe that both 117 and 115 both offer potential buying areas.