The EUR/JPY had been falling but has now formed a double-bottom at the lows which is bullishly converging with momentum. This could signal a recovery bounce with a break above 97.94 – the 76.4% Fibonacci level of the previous down-move – showing bulls are in control, and then a break of 98.15 opening the way to expansion up to 98.90 as the double bottom plays out. The target is also at the level of a trend-line and a weekly pivot so would be expected to exert resistance. More downside, on the other hand, finds support at the monthly pivot at 97.15.
Written by Forex4you.com