EUR/JPY’s rally that started on 16th February and was further supported by the decision of the BoJ to expand its purchase program is still in progress and reaches as high as 106.00 so far today. In the big picture, the crossover of the 89 period SMA by both the 20EMA and the 50EMA on the daily chart reinforces the bullish bias. The bias remains on the upside on the hourly chart with the 20EMA and 50 EMA holding comfortably above the 89 period SMA. The break above the 50% Fibonacci level from the high of August 2011 to the low of January 2012 on the hourly chart is further supporting that the bearish trend has reversed, favouring long positions above 106.00 that could target 108.80 On the downside, the break below key support at 104.63 could open the door for the 100.60 area.

Dafni Serdari
Market Analyst
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