Last week EUR/JPY moved ahead of 101.46 without any resistance but then found some resistance a few pips below the next resistance level mentioned last week i.e. 102.52. This resistance was also broken and EURJPY went as high as 103.29 and closed for the week at 102.42.
The significant point was the break 102.52, which was the peak of the resistance zone during December 14th to December 27th, 2011.
The price action suggests that we cannot ignore some more upward movement even with the overall bearish outlook for EUR/JPY. For the next week, initially we will stay neutral and would expect some sideways move or even some consolidation/correction but then we would expect some more upward gains towards 103.70 and if the currency pair breaks over 103.70/103.80 resistance zone then further upward but slow move towards the psychological resistance of 104.80/105.20.
Euro movements can be very sensitive to any new updates and hence change of sentiments from Euro region. A small change of sentiments can cause some unexpected volatile moves and hence a very careful approach is required while trading with Euro pairs.
Please note that we are considering the current upward moves only as correction during the overall downtrend. We would be expecting a fall from one of the resistance levels mentioned.
On the downside any firm break below 101.60 will start changing the outlook for further upward correction for EUR/JPY. A break below 101.60 will represent a break of 22-day EAM as well as the break of Tenkan line support of daily Ichimoku cloud. Below 101.60 we would again expect frequent supports near 101.10, 101.55/101.60 and then 99.75. A break below 99.75 will change our focus back towards the resumption of the downward trend and the confirmation of this will come with a break below 99.20. With such a move we can change our focus back towards a retest of 97.03. As we have been mentioning for past couple of weeks that below 97.00 the strong psychological support of 95.00 would start working and any subsequent downward move should be slow and with frequent supports near 96.60 and above 96.20 and 95.60.
You may also check the weekly eurjpy forecast/Outlook and daily eur/jpy technical analysis at ForexAbode.