EURJPY continues to trend higher and extends steep upleg into sixth straight day, to hit new record high above 171 mark in early Monday trading.
Bulls firmly hold grip despite overbought conditions and signals from Japan’s authorities about the intervention to support falling yen, which came under increased pressure after dovish BoJ’s stance in the last meeting.
The pair is on track for the first monthly close above psychological 170 level, with last week’s significant gains and completion of bullish engulfing pattern on weekly chart, as well as long tail on last week’s candle, adding to positive signals.
However, initial warnings about rally’s stall cannot be ignored.
Technical studies are overbought on daily and monthly chart, where a loss of bullish momentum is evident, but any firmer signals are still to be seen.
Until then, we will hold in bullish mode, but with increased caution and tightened stops.
Broken 170 level and 2008 former record high (169.95) reverted to solid supports, reinforced by nearby converging 20/10 DMA’s (169.65/60), loss of which to generate stronger bearish signal and open way for deeper pullback.
Res: 171.50; 172.00; 172.20; 172.96.
Sup: 171.00; 170.60; 170.00; 169.60.
