The EURJPY is already up more than 100 pips from the area I pointed out on Saturday.
If you watched Saturday’s Forex forecast video and scrolled down to the EURJPY annotated chart, you know 119.20/30 was a support area on my radar.
Notice how both Monday and Tuesday caught a bid from this region.
In fact, this week’s low of 119.11 is just nine pips below the 119.20 level I pointed out over the weekend.
Monday’s session even carved an inside candle, which illustrated consolidation before the next leg higher.
I also said on Saturday that a daily close above the area just below 120.00 would expose the 121.00 region.
Tuesday’s 120.09 close did just that.
We can see how EURJPY buyers have, at least so far, defended the 119.90 to 120.00 area as new support.
So where to from here?
As long as 119.90 is intact as support on a daily closing basis, I have to respect the potential for a move higher from EURJPY.
More specifically, a retest of the 121.00 area including 121.40.
Alternatively, a daily close back below 119.90 would be a sign of weakness and would also re-expose 119.20/30.
Remember too what I mentioned on Saturday.
Since carving the mid-September high, the EURJPY has carved a short-term ascending channel.
Patterns like this can serve as a guide for the move higher.
In other words, if we see EURJPY extend higher toward the channel top near 121.40/50, odds are it’s going to attract sellers.
At the same time, an eventual rotation lower into channel support is likely to attract buyers.
This ascending channel could also represent a corrective move within the longer-term downtrend.
As always, time will tell.
But for now, the EURJPY is likely to remain well bid while above 119.90 with a target of that 121.00 area.