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EUR/JPY Technical Analysis: Higher-Low after Bullish Break post-ECB

EUR/JPY Technical Analysis: Higher-Low after Bullish Break post-ECB

James Stanley, Senior Strategist

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Talking Points:

In our last article, we looked at EUR/JPY after a strong move-higher off of a key level of support. But as we had warned, resistance was showing-up ahead of a European Central Bank rate decision, and traders would likely want to wait for this level of resistance to be broken-thru before looking to press top-side approaches. On the below chart, we look at the bullish breakout in the pair after last week’s ECB meeting.

Chart prepared by James Stanley

Also on the chart are the two support levels identified in our last article in the effort of catching the next ‘higher-low’ in the bullish EUR/JPY move. Buyers have showed-up around the ‘S1’ level of support, comprised of a ~30-pip range between two different Fibonacci levels. At 121.65 we have the 23.6% retracement of the post-Election move in the pair and at 121.95 we have the 50% retracement of the ‘Abe-nomics’ move in EUR/JPY, taking the low from 2012 up to the high set in 2014.

This can open the door for bullish approaches in the pair. Traders can investigate stops below the ‘S2’ zone of support identified above; and this can highlight the 123.11 area of resistance for initial profit targets, and this can be an opportune area to move stops to break-even. If bulls can push price action above 123.11, the next level of resistance at 124.09 becomes interesting for a secondary profit target; and if that level gives way, resistance at 125.00 and then 126.45 become attractive for additional top-side targets.

Chart prepared by James Stanley

--- Written by James Stanley, Analyst for DailyFX.com

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Contact and follow James on Twitter: @JStanleyFX

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

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