The strong US retail sales data saw a rebound in risk appetite and a weaker JPY and the key Euro crosses are bid as well, as EURJPY pressed beyond the bounds of the recent triangle of consolidation.
EURJPY is breaking higher through the descending line of consolidation created by the last six weeks of trading, so we’re at a pivot point that either takes us considerably higher or we see a rejection of the attempt and a return to the range. The timing is interesting, of course, because of this week’s EU summit on Thursday/Friday, which is the next critical event risk for the entire EU project.
Chart: EURJPY
EURJPY is breaking through the upper bound of the descending line of consolidation this morning. A successful pull through this area could have implications for a test of the 103.50+ highs and eventually 105.00. The Ichimoku technicals shows the price moving above the blue Kijun line rather firmely today, a bullish confirmation signal. The 1.3000 level in EURUSD is a vital confirmation signal for any further upside argument.
John J Hardy,
SAXO BANK