EURJPY-The cross is weakening for a third day in a row after failing at the 105.04 level on correction. This suggests the cross should resume its downside pressure. This view remains valid as long as EURJPY continues to hold and trade below the 104.74 and the 106.36 levels. This will leave further downside pressure towards the 102.47 level with a violation of there allowing for a move further lower towards its key support at the 100.75 level, its Oct’2011 low. Further down, support lies at the 100.00/99.87 levels, its July’2010 lows. Alternatively, on continued corrective offensive, EURJPY will have to convincingly break and hold above its Oct 31’2011 high at 111.52 level to reverse its medium term bearishness tone and trigger its upside recovery towards its Aug 29’2011 high at 111.92 and possibly higher towards the 113.00 level. All in all, EURJPY faces the possibility of weakening further on ending its present correction.
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