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Decent EURJPY Upside if 136.41 Breaks

Decent EURJPY Upside if 136.41 Breaks

Tyler Yell, CMT, Currency Strategist

Bias: Bullish

Point to Establish Long Exposure: Break / Close > 136.41 July 14th High

Invalidation Level: 134.40 Weekly S1 Pivot

Target 1: 137.12 200 Day Moving Average

Target 2: 141.055 June 4th High

JPY will likely have a hard time catching a bid as equities look to continue their historic climb. DAX is on a tear again breaking out of a multi-month corrective channel, Nasdaq 100 is at its highest since March 2000 (Month of .com Top) & EUR seems to be in a corrective manner after the Greece bailout was approved by parliament.

From an Elliott Wave perspective, a break above the July 14th high at 136.41 could be the first validation of a resumption of the impulsive incline from 126. The move from 141.05-133.33, while aggressive, has been choppy and is common among corrective waves. Corrective waves precede anot

Currently, EURJPY is finding support near the 61.8% retracement of the 133.33-137.79 zone & July 9th high so a pivot higher there could be significant.

KeyEUR/JPY Levels:

* 3rd resistance: 137.12 200-DMA

* 2nd resistance: 136.62 55-DMA

* 1st resistance: 136.41 June 14 high

* Spot: 135.11

* 1st support: 135.07 July 9 high

* 2nd support: 133.60 100-DMA

* 3rd support: 133.31 July 8 low

From a volume perspective, the move into the support mentioned above hasn’t attracted much demand. When falling prices do not attract volume, the move is suspect and from a probability point of view, a return to the prior trend is likely. In EURJPY’s scenario, the trend is higher. Additionally, you’ll notice the volume footprint shows sharp demand on up days within the corrective move. This further favors upside.

Volume Analysis on EURJPY

EURJPY Coming Into Support after Corrective Waves Unfolded

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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