EURJPY- While the cross closed slightly higher above our highlighted resistance at the 116.46 level, its April 18’2011 low on Tuesday, it has backed off that level and continues to weaken.
As long as that level holds as resistance, we see risk of a return below the 114.78 level with a break of that level calling for further weakness towards the 113.55 level, its Mar 24’2011 low. On the other hand, the cross will have to climb above the 121.79 level, its April 28’2011 high and then 123.29 level, its 2011 high to annul its entire corrective weakness.
If this seen, it will set the stage for additional strength towards the 124.00 level followed by the 125.43 level, its Jan 05’2010 high. In summary, nearer term risk remains to the downside.