Note:All indicators for the overall outlook and forecast of EURJPY are based on the daily forex charts and in some cases 4-hourly or weekly charts and is updated during the weekends.
“(2 weeks back): The strong fall below 130.00, just after moving over that indicates that we can expect some more downward moves. On the downside the first level support is expected near 128.43. In case this support is broken then we would expect further decline towards 127.72/127.77 and some good support there. This support zone is derived from the previous week's price action as well as psychological aspects. On the downside if the above mentioned support fail then some extended volatile sideways move between 125.00 and 130.00 can be expected. One of the lowermost key support would be 125.16/125.00. This zone is a combination of the supports of the Kijun line support of daily Ichimoku cloud and the psychological push of 125.00 level.”
Euro-Japanese Yen (EUR/JPY) had moved the way we had indicated 2 weeks back (quoted above) and the pair had gone 4 pips below the mentioned 125.00 level. The strong recovery from 124.96 failed to retest the previous high of 131.12 and the currency pair fell from 130.67 to 127.14 before closing for the week at 127.74.
The strong failure below the previous high of 131.12 and the strong fall afterwards suggest that we can see some more downward moves initially. On the downside we expect first support near 125.90 to 126.35 support zone. This support is derived by 55-day EMA and the possible trend line by joining the lows of 123.87 and 124.96 on the daily chart. In case this support zone does not hold and a break below this take place then a retest of 124.95 and then possibly a move towards April 5th's 123.87 cannot be ignored.
Please note that any downward move as indicated above will be considered as consolidation in the recent upward trend and we expect the reversal of the downtrend to continue. With the above supports holding, on the upside another break of the recent 131.12 should target 133.40/133.52 resistance zone first and then possibly 134.20/134.37 zone. Bothe these are derived from November 2009 beginning to mid-January 2010 resistance zones, from where a very strong down fall had started.
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