EUR/JPY Forecast December 20, 2012, Technical Analysis

The EUR/JPY pair initially shot straight up during the session, but found quite a bit of resistance once we got closer to the 113 level. With that being said, this pair has recently broken above a significant resistance area at 110, and this of course caught everybody’s attention. However, by the end of the day we had pullback enough to form a wicked looking shooting star, and could see a bit of a fall from this level.

With the Bank of Japan meeting later today though, it is very likely that they will ease and expand their asset buying program. The question really is whether or not it is going to be enough to punish the Yen in the markets. We won’t know until after that announcement, but we do expect the 110 level to serve as significant support. If we can break above the highs from the shooting star from the Wednesday session, we would see that is extremely bullish as well.