EUR/JPY (daily chart) as of February 15, 2013 pulled back just below key support around 123.00 before making a quick recovery to the 125.00 handle. This pullback occurs after price reached a 34-month high at 127.69 last week, just short of key resistance around the 128.00 price region. Despite this relatively shallow pullback, the bullish trend for EUR/JPY continues to be strong as it has been since the July 2012 low around 94.00. The uptrend accelerated dramatically in November, when price broke out above both a descending parallel trend channel as well as the major 105.00 level.
Since that time, the pair has broken out above many important resistance levels, including 115.50, 120.00, and 123.00, with very little interruption in the way of bearish retracements. The current retracement appears, for the time being, to be no different. The trend bias is still strongly to the upside. If price is able to stay above 123.00 support, the key upside resistance objective resides, once again, around the 128.00 level. Any breakout above that level would confirm an uptrend continuation, with a further resistance objective around the 131.00 price region.
James Chen, CMT
Chief Technical Strategist
City Index Group
Forex trading involves a substantial risk of loss and is not suitable for all investors. This information is being provided only for general market commentary and does not constitute investment trading advice. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any financial instrument and should not be used as the basis for any investment decision.
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