EUR/JPY forecast for the week of December 24, 2012, Technical Analysis

The EUR/JPY pair shot higher during the week but met serious resistance at the 112 handle. The pullback that we saw after that move resulted in a shooting star, and as such this is a fairly bearish signal. However, as long as we stay above the 110 handle it appears that we will continue going higher. A break below the 110 handle however would suggest that we will fall back down to about 107. If that does happen, we will still retain are bullish bias, and simply look for support in that general vicinity. However, these extremely bullish candles like we solve two weeks ago rarely happen in a vacuum. With that being the case, a move above the highs from this week would be an extraordinarily bullish sign.