EUR/JPY (daily chart) as of February 15, 2013 pulled back just below key support around 123.00 before making a quick recovery to the 125.00 handle. This pullback occurs after price reached a 34-month high at 127.69 last week, just short of key resistance around the 128.00 price region. Despite this relatively shallow pullback, the bullish trend for EUR/JPY continues to be strong as it has been since the July 2012 low around 94.00. The uptrend accelerated dramatically in November, when price broke out above both a descending parallel trend channel as well as the major 105.00 level.
Since that time, the pair has broken out above many important resistance levels, including 115.50, 120.00, and 123.00, with very little interruption in the way of bearish retracements. The current retracement appears, for the time being, to be no different. The trend bias is still strongly to the upside. If price is able to stay above 123.00 support, the key upside resistance objective resides, once again, around the 128.00 level. Any breakout above that level would confirm an uptrend continuation, with a further resistance objective around the 131.00 price region.
James Chen, CMT
Chief Technical Strategist
City Index Group
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