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Forex Analysis: EUR/JPY Pulls Back from Resistance within Steep

EUR/JPY Daily Chart

EUR/JPY (daily chart) has retreated from resistance after having made significant advances since mid-November. This occurs within a clear bullish trend channel that extends back to the July 94.00 region lows. The strong uptrend that has traversed this channel broke out above several important resistance levels, including 100.00, 104.50, and most recently, 106.00. Having closely approached yet higher resistance at 108.00 yesterday, the pair established a new 7-month high. Price has pulled back from that high as it reached both the 108.00 resistance level as well as the upper border of the parallel trend channel. The 108.00 level could prove to be a difficult barrier to breach. But if the pair is able to rise above it, thereby accelerating the overall bullish trend, price could reach towards major potential resistance around the 111.50 price region. To the downside, key potential support levels within the context of the bullish trend continue to reside around the 106.00 and 104.50 price regions.

James Chen, CMT
Chief Technical Strategist
FX Solutions

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James Chen

James Chen

James Chen is Chief Technical Strategist for City Index Group. He is also a Chartered Market Technician. He is the author of the books: "Essentials of Foreign Exchange Trading" (John Wiley & Sons, 2009) and "Essentials of Technical Analysis for Financial Markets" (John Wiley & Sons, 2010). Mr. Chen writes currency analysis, leads forex trading seminars and has appeared in numerous major financial media outlets, including CNBC, Bloomberg TV, Forbes, Reuters, Dow Jones, and the Associated Press.