EUR/JPY Technical Analysis: Will Prior Resistance Bring Fresh Support?

Talking Points:

- EUR/JPY staged a brisk topside breakout last week.

- This bullish breakout continues a trend that’s been in-place for almost a full year now.

- If you’re looking to improve your trading approach, check out our Traits of Successful Traders research. And if you’d like more of a basic primer for the FX market, check out our New to FX Guide.

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EUR/JPY to Fresh Two-Year Highs

Last week saw quite the move in EUR/JPY…

After coming into the week digging out support at a prior area of resistance, EUR/JPY went on a strong bullish move to set a fresh two-year high in the pair at 137.50. This gave us a total range for last week of more than 330 pips as a combination of Euro strength and Yen weakness showed-up around the same time to help continue the bullish trend. The price of 137.50 was a secondary profit target in our analyst pick after the level of 136.00 was taken out.

EUR/JPY Daily Chart: Fresh Two-Year Highs

Chart prepared by James Stanley

Will Bulls Show up to Offer Support at Prior Resistance?

After last week’s breakout, the natural question is now one of continuation potential, and there are two areas of relevance than can be helpful for this purpose. The first is our target from last week, around 136.00. Support showing in this area could retain the pair’s bullish stance as we move deeper into February. Also an option would be the 135.00 area, which had previously helped to establish a zone of support before price action way to last week’s deeper support test around 134.41.

On the below chart, we’re looking at each of these price areas, and support showing at either opens the door to bullish continuation strategies, targeting a re-test of that prior high at 137.50.

EUR/JPY Four-Hour Chart: Potential Supports Applied

Chart prepared by James Stanley

To read more:

Are you looking for longer-term analysis on the Euro or Japanese Yen? Our DailyFX Forecasts for Q1 have a section for both EUR/USD and USD/JPY. We also offer a plethora of resources on our EUR/JPY page, and traders can stay up with near-term positioning via our IG Client Sentiment Indicator.

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

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