EUR-JPY: While the cross trades and holds below the 131.24 level, its Jan. 6 low, we continue to see risk to the downside toward the 129.19 level, its Dec. 22 low. The fresh downside pressure is coming on the back of a selloff to as low as 129.26 today. If an eventual break and hold below the 129.19 level materializes, threats of further downside will develop toward the 127.29 level, its Dec. 18 and then its Nov. 26 low at 126.83. Its daily studies are both bearish and trending lower, suggesting further weakness.
Corrective recovery if triggered at the current price levels will initially target its Jan. 17 low at 130.69 ahead of its Jan. 6 low at 131.24, where we expect a reversal of roles to turn the cross back down again. Further out, the 133.62 level, its Jan. 14 high and the 134.36 level, its Jan. 11 high, come in as the next upside targets. On the whole, having halted its strength at the 134.36 level and weakened through the 131.24 level, risk is now seen toward the 129.19 level and possibly lower.
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
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.