EURJPY is on a second day of recovery following its recent corrective weakness. However, we will like to see it return above the 123.29 level, its 2011 high to convince the market it has ended that correction.
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This will resume its medium term uptrend towards the 124.00 level. Further price extension will target the 125.43 level and possibly the 126.00 level. Its daily RSI has turned higher supporting this view. The risk to its current strength will be a return below the 116.46 level, its April 18’2011 low. This will open up further downside risk towards the 115.98 level.
We expect that level to reverse roles as support and turn the cross back up in the direction of its medium term uptrend.
All in all, the cross is now strengthening but needs to break and hold above 123.29 level to resume its medium term uptrend.
