EUR/JPY 170.00 TestEUR/JPY was a high-flyer into late-July as the pair put in a very rare test above the 170.00 level. That price was almost in play back in 2007 and 2008, but ultimately the pair held about five pips below the big figure before plummeting on the back of the financial collapse.
Sixteen years later EUR/JPY was finally able to mount above 170, albeit temporarily, as price climbed above last summer until the massive reversal developed in July, sending prices spiraling all the way down to support around 155.00.
More recently, as Yen-weakness returned in the latter portion of Q2, combined with Euro strength as EUR/USD climbed to three-year-highs, EUR/JPY once again was able to push above the 170.00 handle.
Last week saw a bearish engulfing candlestick develop on Monday, and given the overbought backdrop at the time, the door quickly opened for bears. But since then, buyers have put up a stand around that same 170.00 level with an assist from last week's BoJ meeting.
At this point there's been a hold of higher-lows with the 170.00 psychological level coming into play to hold support. This keeps the door open for bullish continuation and the Fibonacci retracement produced by last week's pullback remains of interest with a few important levels of note. The 172.30 area is the spot for bulls to beat, as this would mark a higher-high and that would then open the door for a re-visit of 173.00 and if bulls can muster that, there's the potential for more as it'll look like a move of broader trend continuation. - js
