FX.co ★ EUR/JPY middle term view June 3, 2011

:: Daily ::

Early on the Daily chart , The EUR/JPY pair formed a very strong bullish hummer at the level of support 106.80 (which is a previous low) indicating further upside movement

Strong upside movement followed this signal up to 123.35 from which the price began to make lower highs and lower lows

After reaching the 61.8% Fibonatcci price has been consolidating inside a bullish channel making higher lows indicating weakness of bears at this junction of the chart

:: 4H ::

Failure of the price to break the upper side of the channel led the pair down to 116.00 which is a good support level on the medium term.

It's important to notice that 116.00 is also the backside of the broken short term downtrend

This level 116.00 was a good level to a go long as we mentioned before targeting the upper limit of the channel and previous high .

Now we need to see the price action towards the upper limit of the channel which is a strong resistance level on the short , medium term .

IF price fails to break and close above area 117.40 - 117.70 , this will lead the pair down again

if we see 4H candlestick closure above the mentioned area , we will witness a strong upside movement maybe up to 119.00 level .