EUR-JPY Could Target 127.89

As long as the EUR-JPY, or euro-yen, currency pair holds within its established rising channel and above 123.41/123.13, it should eventually break and hold above 127.89.
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By Mohammed Isah of fxtechstrategy.com

The

EUR-JPY

, or euro-yen, currency pair has two technical advantages in its favor.

First, it closed on a positive note Friday, reversing its Wednesday and Thursday losses. This confirms how important the 123.41 and 123.13 levels (April 8 and April 19 lows, respectively) are in holding off bear attacks.

We will continue to expect the EUR-JPY to return to 127.89 as long as the 123.41/123.13 zone remains unbroken.

The second technical advantage for EUR-JPY is a short-term rising channel now in place, which confirms a pattern of higher highs and lows. This proves that the pair's recovery that began at 119.63, the 2010 low, remains intact while the cross continues to trade within the rising channel.

Above the 127.89 level, the April 2010 high, resistance is located at 128.35, the Jan. 26 high, and then 129.48, the Jan. 21 high.

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Downside risk for EUR-JPY below the 123.41/123.13 levels comes in at 121.03, the March 22 low, and then at 119.63, the 2010 low.

Overall, as long as the EUR-JPY, or euro-yen, currency pair holds within its established rising channel and above the 123.41/123.13 levels, it should eventually break and hold above 127.89.

Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces

The Professional Suite

for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.