The EUR/JPY pair has been falling within a downward sloping channel over the last few days but today a strong bullish move has brought it to to the upper channel-line where it is currently being resisted. The strength of the move indicates a breakout may be on the cards, with the area of 101 targeted, where substantial resistance may prevent further gains temporarily. Alternatively the channel may continue to unfold lower, with the previous lows at 99.25 compromising an initial target down, however the monthly pivot at 99.60 could prevent deeper penetration.

Analysis prepared by:

Joaquin Monfort
Forex4you analyst