EUR/JPY Fall to Session Low of 122.50
After yesterday's rejection from 123.53 level, on Thursday too, the EUR/JPY pair failed to sustain its move above 123.00 handle and has now dropped to day's through level of 122.50.
The
ongoing pull-back in the Euro against the US Dollar has attributed to
today's fall in the EUR/JPY pair. However, in absence of any major
economic release (ahead of Friday's US payrolls data) the fall could be
limited to the day.
From technical perspective, the pair has been
oscillating within a short-term ascending trend-channel formation on H4
chart, with trend-channel support close to 122.50 level. However, when
considered in conjunction with the pair's sharp fall in the previous
week, the ascending trend-channel seems to constitute towards formation
of a Flag, a continuation chart pattern. Hence, a decisive break through
the trend-channel support might now trigger a fresh leg of downward
momentum for the pair.
Technical levels to watch
Below
122.50 trend-channel support, the pair could easily extend its weakness
towards its recent lows support near 121.75-70 area. A sustained break
to fresh multi-month low now seems to open room for an accelerated fall
towards its next major support near 119.00 mark, level not tested since
March 2013.
Meanwhile on the upside, 123.00 round figure mark
remains immediate hurdle to clear. Momentum above this immediate barrier
should assist the pair towards the ascending trend-channel resistance
level, currently near 123.75 area.
