The EURJPY tested and held channel trendline support this morning and there is a push back to the upside. The support is being helped by unsubstantiated talk of a “think tank” report speculating that the BOJ might look to ease further. This should weaken the JPY further.
The targets on the topside would now look toward retracements of the last leg down:
- 107.54 = 38.2%
- 107.746 = 50%
- 107.952 = 61.8%
- Also the downward sloping trendline at the 108.05 level currently
Looking at the daily chart below, the price fell below trend line support today at the 108.10 area (after holding the support trendline yesterday). A move back above this level would not be welcomed by shorts looking for continued weakness toward the 200 day MA and 38.2% retracement at the 106.00 area.
Will be watching the retracements outline above to see if there are seller, but I fear that the rumored fundamental report, the bounce in the USDJPY and bounce in EURUSD (back above the 1.3054 midpoint for 2012) may have put the low in for the EURJPY for the time being.