Slip Back in EUR/JPY Currently Assumed Temporary

The FX Specialist view - After EUR/JPY found interesting support from a long term 76.4% level earlier in 2010, initial bull signs appeared. The current s/term slip back might unnerve the early bulls but it is worth them keeping the faith for now.

• WEEKLY CHART: After long term 76.4% support was found (not shown on this Weekly chart) there has been an initial recovery to the 23.6% level. Beyond here, note how higher 38.2% nicely coincides with the 119.63 Feb low.
• DAILY CHART: After adopting an initial bull stance in the Commodity Specialist Guide the market has slipped back – to s/term 76.4% support just above 109.00. Perhaps this level can work again. It offers a limited risk opportunity to aggressive buyers (stops below the 107.30 Jun low), but bulls now need to see recovery. First key resistance now comes from the 114.83/115.17 dual Fibo retracement area. A break through this would bolster the bull argument and turn focus on the 119.63 Feb low, just below which is 38.2% from the Weekly chart and just above a 61.8% level on this chart. This still has the potential for an interesting recovery situation.

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