16 Feb 2016
EUR/JPY back to critical levels after short-lived recovery
The yen rose in the market on Tuesday after a two-day correction. It did not reach fresh 2016 highs but it approached important levels in several crosses. EUR/JPY dropped back below 127.00 and the key area around 126.00 is back on the radar.
EUR/JPY correction over?
Last week the pair dropped to 125.77, hitting the lowest level in 32 months but it managed to rise quickly back above 127.00 and started to recover. It climbed during the next two days. Today it continued to rise but after reaching levels on top of 128.00 it lost strength and started to decline.
It accelerated during the European session and bottomed on American hours at 126.61. Currently, it trades at 126.90, down 90 pips from yesterday’s closing price.
The decline pushed the price below an uptrend line originated from last week lows. The correction appears to be over and if the pair holds below 127.00, a test of 2016 lows seems probable. If it remains on top, it could suggest that a temporal bottom has been reached leaving the door open for a more consistent corrective move.
EUR/JPY correction over?
Last week the pair dropped to 125.77, hitting the lowest level in 32 months but it managed to rise quickly back above 127.00 and started to recover. It climbed during the next two days. Today it continued to rise but after reaching levels on top of 128.00 it lost strength and started to decline.
It accelerated during the European session and bottomed on American hours at 126.61. Currently, it trades at 126.90, down 90 pips from yesterday’s closing price.
The decline pushed the price below an uptrend line originated from last week lows. The correction appears to be over and if the pair holds below 127.00, a test of 2016 lows seems probable. If it remains on top, it could suggest that a temporal bottom has been reached leaving the door open for a more consistent corrective move.