by Himanshu Jain
January 23, 2012: EUR/JPY went down to 97.03 and found strong support there, which was little above the support of 96.80. The strong upward move broke the mentioned 99.90 resistance and then took EURJPY to 100.33 as we had mentioned. This strong correction briefly broke the resistance level of January 3rd and hence the price action makes us expect some more upward correction.
Overall we stay bearish but a break of 100.33 should bring in some more upward correction towards the 55-day EMA resistance of 100.65 and if a firm break takes over 100.65/100.80 range then we would expect some more correction towards the next resistance zone of 102.00 to 102.50. This zone would represent the resistance of the upper edge of the daily Ichimoku cloud as well as resistance area during the end of December 2011. Not only this but 102.50 is also the Fibonacci 38.2% retracement of the downward move from October 30th, 2011 to January 16th, 2011.
With the above mentioned resistances, including 101.33, we would expect another fall from one of these resistances. On the downside we would expect some support in the range of 98.50 to 98.70. This zone would represent the Tenkan-sen and Kijun sen support of daily Ichimoku cloud and also the low of the previous upward daily candle. Any firm break of this should take EURJPY towards the recent bottom of 97.03 after some support near 97.50. Below 97.03 the supports expected are near 96.80. Near this level the strong psychological support of 95.00 would start working and any subsequent downward move should be slow and with frequent supports near 96.60 and above 96.20 and 95.60. But in case the market sentiments do not have sudden change because of some major economic news from the Euro zone, subsequently we expect a move towards 94.10/94.05 (inverse 61.8% projection of the upward correction between October 3rd to 30th and also the psychological aspects of the price action).
Overall our near-term bearish outlook will only change to expect some convincing upward gains if EURJPY breaks over 102.20/102.50 range firmly. In that case also the 105.00 range is expected to bring a strong resistance.
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