EUR/JPY (daily chart) has retreated from resistance after having made significant advances since mid-November. This occurs within a clear bullish trend channel that extends back to the July 94.00 region lows. The strong uptrend that has traversed this channel broke out above several important resistance levels, including 100.00, 104.50, and most recently, 106.00. Having closely approached yet higher resistance at 108.00 yesterday, the pair established a new 7-month high. Price has pulled back from that high as it reached both the 108.00 resistance level as well as the upper border of the parallel trend channel. The 108.00 level could prove to be a difficult barrier to breach. But if the pair is able to rise above it, thereby accelerating the overall bullish trend, price could reach towards major potential resistance around the 111.50 price region. To the downside, key potential support levels within the context of the bullish trend continue to reside around the 106.00 and 104.50 price regions.
James Chen, CMT
Chief Technical Strategist
FX Solutions
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