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EURJPY Drifting Into Channel Support

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We continue to keep a close eye on EURJPY as the pair carves out what may be the second corrective move inside the ascending channel that began in mid April.

Buyers stepped up during Friday’s session, pushing the pair higher on a retest of the 137.90 handle. However as I mentioned in last week’s commentary, a move to channel support is needed in order to consider any bullish setup as a valid buying opportunity.

At this point it’s unclear whether that retest will come at the 137.90 level or the May highs at 136.70. For this reason I’m standing aside for now until we have a clearer picture of where EURJPY will come into support.

Regardless of where the pair finds additional buyers, I’m only interested in the long side at the moment. Only a daily close below channel support would negate this bullish bias and open up the potential for a move lower.

Summary: Watch for bullish price action on a retest of channel support at either 137.90 or 136.70. Key resistance above 137.90 comes in at 140.60 and 142.27.

EURJPY ascending channel on the daily time frame

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