EURJPY: Breaks Out Of A Five-Month Range.
EURJPY: The cross surged higher Tuesday breaking through its five months broader range top at 131.06 and its Oct 10’08 high at 132.23 to close higher at 132.44.It was seen strengthening further in early morning trading today. The rectangle pattern break out price target stands at the 148.40 level, established by measuring the width of the range and projecting it from the break out point. With this new price development, EURJPY has put in a bottom at the 112.09 level and triggered a short term upmove initially towards its 200 ema currently at the 134.36 level with a cut through there extending further gains towards the 138.57 level, its Oct 20’08 high and then the 141.74 level, marking its Oct 14’09 high. The cross is supported by its weekly momentum though that of the daily timeframe is overbought which sometime occurs during range break outs. Pullbacks are now expected to be contained by its just eroded range top at 131.06 thereby turning the cross higher again. While we do not expect this level to give in, if it does our upside scenario will be invalided and a trade back into its range towards the 129.72 level, its Dec 29’09 high will follow with a loss of there putting the pair in position to even decline further targeting the 126.09 level, its Feb 26’09 high. On the whole, EURJPY is now poised to ascend further higher having resolved out of its broader sideways range to the upside.
126.09 Feb 26’09 high
122.17 Jan 19’09 high
120.03 Feb 09’09 high
127.66 Jan 08’09 high
129.72 Dec 29’09 high
131.06 Range top
Daily Chart: EURJPY
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