EUR/JPY: Setbacks have now finally reached and slightly exceeded the lower end of a multi-week range dating back to March of 2009 and it will be interesting to see if the cross can respect the range bottom and bounce, or finally break below the medium-term platform to expose a more significant drop back towards the 115.00 area. Short-term technical studies would however suggest that a bounce out from current levels is the more likely scenario with daily studies in the process of recovering following last Thursday’s violent declines. A break and close back above 125.00 will now be required to confirm basing. In the interim, we recommend that traders stay on the sidelines.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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