EUR/JPY Forecast December 28, 2012, Technical Analysis

The EUR/JPY pair shot straight up during the Thursday session again as we continue to climb in a parabolic manner. The Bank of Japan is sent to start bashing the Yen in the near-term, and as a result the Yen is falling against pretty much everything in the marketplace. With this being said, if you are not long of this pair already, buying at this point time would simply be “chasing the trade.” This is without a doubt one of the most dangerous ways to trade, and almost always ends up and losses.

However, we do have a gap that’s centered on the 112 level, and a pullback to that area would be an invitation to start buying again on signs of support. We may or may not get it in the next couple sessions, but gaps typically do get filled in the relatively near term. We believe that area will be a launching pad for much higher prices. We also believe that 115 will be resistance going forward, so we think that the upside in this trade is probably somewhat limited for the next couple of sessions.