EUR/JPY: Well Bid, Decisive Break Above 112.70 Could See 114 |
TOKYO, Feb 2 (IFR) – EUR/JPY looks to be very well bid following the break above 1.3800 in EUR/USD. USD/JPY heaviness does look to be a drag but the cross could trade higher on a decisive break above 112.70, currently resistance on the hourly chart. A trade through this level suggests a retest of the 113-handle and a possible retest of the 114.02 high seen on January 27. Offers are eyed ahead of 112.70 and 113.00 but trader stops lurk above both of these levels. Larger stops are seen above 114.10. Asia saw a high of 112.70 yesterday and the high so far this morning has been 112.64. Support in the cross is seen from around the 112.48 low seen so far this morning. More is seen ahead of 112.00 and then at 111.80-90, 111.88 the retracement low seen in London overnight.
Technically, EUR/JPY is looking good after a rejection of moves into its Ichimoku cloud. Two attempts down on Friday and Monday were roundly rejected. The cross is currently trading around its rapidly ascending Ichimoku tenkan line at 112.69. The ascending 100-day moving average has crossed above the descending 200-day moving average, with the former at 111.84 and the latter at 111.82 today. The flat-lining top of the Ichimoku cloud is at 111.51 below. It remains here till the 10th. All of these levels aside from the tenkan line will likely work as supports going forward. EUR/JPY currently trades 112.59/62.
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