EUR/JPY has more room to run

3 thg 6, 2015

The Euro defies logic and rallies against its major counterparts such as the USD and Yen. Concerns regarding Eurozone growth, the possible Greek exit, and even a British exit do not dissuade traders from buying up the Euro. Regardless of the theory we entertain the reality is the Euro has been moving higher. The explosive move against the USD was curtailed by the end of the day today, but against the Yen the common currency closed near its highs. The question is will EUR/JPY run higher from here?

From a technical and fundamental perspective - yes. Price closed well above the recent support/resistance area of 136.25, and the next resistance is not until 141. The Andrew’s Pitchfork in the chart uses 50% median lines between the primary median line and its upper and lower counterparts. On 5.29 price struck the previously mentioned support/resistance line, retraced to the lower 50% median line where price bounced and rallied through resistance. Now above the median and line and having run into the upper 50% median line price has settled back a little but still coiled to move higher.

Over the next few sessions, we should see price rally to the intersection of the upper median line parallel and the 141 support/resistance line.