EUR/JPY Candlesticks and Ichimoku Analysis

EUR/JPY – 132.96

	Last Candlesticks pattern	Time of formation	Trend bias
Weekly	Evening star	June 2009	Sideways
Daily	Shooting star	14 Aug 2009	Up

The single currency continued to move higher in the last trading week of 2009 and just tested the Kijun-Sen as suggested in our previous update, a weekly close above this line would bring further gain to next resistance at 134.54. Looking ahead, it is necessary to see a rise above this level to signal the retreat from 138.49 has ended and extend gain to 136.00 and possibly towards 137.00, however, price should falter well below resistance at 138.72 and then further choppy trading within 126.95-139.26 range would take place.

On the downside, whilst pullback to 131.00 cannot be ruled out, reckon the Ichimoku cloud bottom (now at 129.38) would contain weakness and bring such a rebound to aforesaid upside targets. Only a breach of support at 137.32 would risk another test of 126.95 support and break of this latter level would turn outlook bearish for at least a strong correction of the rise from 112.08 to 125.67 (50% Fibonacci retracement of 112.08 to 139.26) and later next chart support at 124.39.

Based on ActionForex.com Technical Outlook