EURJPY is firmer after the bounce up earlier this week following a sharp fall from highs not seen since late 2015. The cross continues to benefit from strong upside momentum in the short term. Looking at the broader trend, the market has been neutral since mid-September.
The level at 131.45 has provided strong support. Soft support is expected at yesterday’s low of 132.31, which will keep risk to the upside if it holds during the next few sessions.
EURJPY needs to break the 50% Fibonacci and key 133 level to open up the way for more corrective gains towards the 134.48 peak.
Breaking below yesterday’s low of 132.31 would turn the focus back to the downside to target 131.45. From here, the odds increase for a break out of the broader range to move to the downside.
Intra-day risk is tilted to the upside but EURJPY needs to regain the key 133-handle to relieve downside pressure. The broader range that has prevailed since mid-September is expected to remain intact as long as the 131.45 support holds.