By Wednesday’s close, the EURJPY had given up a significant area at 134.30/40. This is the former range top that kept the pair from breaking free between September and December of last year.
Yesterday’s 133.13 close left no doubt that the key area failed to hold as support. As you may well know, former resistance becomes new support and vice versa. That’s especially true when the level is as apparent as it is here.
But sellers had other plans. The 134.30/40 area did attract a few bids Tuesday, but Wednesday’s session was a different story.
So is Wednesday’s close a significant development?
As it stands, the answer is unclear. However, as long as the EURJPY remains below 134.30/40 on a daily closing basis (using a New York close chart), the 131.40 support area is exposed.
Moreover, as long as 134.30/40 holds as resistance, the pair is vulnerable to more substantial pullbacks within this uptrend. Whether or not that comes to fruition is yet to be seen.
One thing I like about the EURJPY is the accuracy of its horizontal levels. There are several others I’m keeping a close eye on which I’ll detail at a later date should sellers get the job done.
For now, it’s all about 134.30/40 resistance and 131.40 support. As long as the former is intact as new resistance on a daily closing basis, the uptrend is vulnerable.
Alternatively, a daily close back above 134.40 would reinvigorate the bullish outlook and expose 136.60.