The Euro surged higher recently not only against the US dollar, but also against the Japanese yen. The EURJPY pair also broke a critical resistance area, which has opened the doors for more upsides in the near term.
There were a couple of releases lined up in Japan today, as the Leading Economic Index representing an economic indicator with 12 indexes such as account inventory ratios, machinery orders, stock prices and other leading economic indicators was released by the Cabinet Office. The forecast was lined up for a decrease from the last reading of 105.5 to 105.2 in February 2015. However, the report highlighted that the Japanese Leading Economic Index was 105.3.
There was a crucial resistance trend line formed on the hourly chart of the EURJPY pair, which was stalling the upside but the Euro buyers managed to breach it. After the break, the pair traded a touch below the 131.00 level, and currently consolidating above the broken trend line. There is a chance of a spike higher above the 131.00 level in the near term. However, if the pair moves further lower from the current levels, then the 23.6% fib level of the last leg from the 128.39 low to 130.95 high might come into play. The hourly RSI is above the 50 level, which is a positive sign.
If the EURJPY pair manages to break the 131.00 level, then next level of interest could be around the 131.40 level where sellers might appear.
Overall, one might consider buying dips in the EURJPY pair as long as the pair is above the 23.6 fib level.
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Posted By Simon Ji of IKOFX Technical Team: Online Forex Broker
Website: http://ikofx.com/
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