Last Friday and Monday, the EURJPY consolidated with 97.84 as the low and 98.34/39 the high. In between there is support at 97.96. Add the 200 hour MA at 98.01 and the 38.2% retracement at the 97.841 and you have the key levels all mapped out.
Today, the price has declined in a trend like fashion. The move lower has reached near the midpoint of the consolidation area at the 97.95 level. In the process, the price tested the key 200 hour MA (green line) at the 98.01 level, but buyers emerged and the last bar has moved back above and we are now seeing a rotation back higher. This area is now key support.
IF the move down today is to continue the momentum move, look for the 98.28 level to attact selling interest on this corrective move. Above that the 98.385 becomes the focus (see chart below). A move above each of these levels weakens the trend move down today (and increases the importance of the bounce off the 200 hour MA – longs from there will feel good). Stay below, and the battle lines will be drawn for the bulls and bears to fight it out with the 200 hour MA below and the resistance up to 98.39 above. Key retracement test for the pair.
