EUR/JPY Forecast December 7, 2012, Technical Analysis

EUR/JPY fell during the session on Thursday as the ECB Chairman Mario Draghi hinted at future rate cuts in the European Union. He also hinted that there would be weaker than expected growth in this economy over the next couple of years, and as a result the Euro got whacked against most currencies.

However, this currency pair is going to be a bit different. After all, the Bank of Japan is currently fighting against Yen appreciation, and as a result we could continue to see this market rise. Also, it is a risk sensitive currency, and although the possibility of a rate cut in Europe will continue to plague the Euro, this pair should still continue to rise over time. However, with lower interest rates a could possibly dampened some of the demand in this pair.

With all this being said, we are still bullish of this market, but need to see a supportive candle somewhere around the 106 level in order to get involved and start buying again. Selling is not a thought until we close on the daily chart below the 105 level.