EUR/JPY Forecast June 4, 2013, Technical Analysis

The EUR/JPY pair fell during the session on Monday, breaking below the 130 handle. This level has been rather supportive, and the fact that the market bounced enough to form a hammer of course suggests just how supportive area can be. A break of the highs from the candle that had formed on Monday, we would expect buyers to step back into the marketplace and push it as high as 133 in the short term. Nonetheless, we do not short this market because there are so many little clusters of support just below, and the fact that the Bank of Japan is willing to work against the value of the Yen. However, we want to see a breakout above the top of the range from the session on Monday in order to feel confident going long as it was a pretty significant plunge.