DAILY FORECAST FOR EURJPY 4th January 2010

Bias:     I feel the major risk is lower now but could be choppy

Daily Bullish:

Gains were seen as expected which exceeded 133.24 but only to stall at 133.59. I feel the major direction is now lower. Thus only while the 132.58 pivot support area holds and generates a push back above 133.10 followed by a breach of the 133.59 high would I begin to look for a stronger picture than would maintain the bullish move for 133.97 and probably the 134.55 major corrective high. Above there note resistance at 135.06 and then 135.66-73.

MT Bullish:

4th January:     We've seen the expected gains and I suspect this is a high within a larger consolidation pattern. Thus, only back above 133.59 and 134.55 would maintain the uptrend for 135.06, 135.66-73 at least. Further resistance is then seen at 136.88 & 137.99.

Daily Bearish: 

While momentum hasn't shown clearly defined bearish divergences at the 133.59 high I feel they are probably correct and thus I feel the larger risk is bearish. The only problem is that the anticipated decline could be quite erratic and choppy. A break below this morning's low at the 132.58 pivot support area should extend losses through 132.20 and 131.80 and into the 130.92-31 support area. Take care here as this could hold in an alternative bullish structure. Breach would maintain losses.

MT Bearish:

 4th January:  Having seen the upside targets I feel we are due a potentially choppy decline down below 128.80 but no further than 128.10.

For access to my daily support & resistance levels please see the Daily Forecast page of my web site For a full description of how to use the analysis please see the Analysis page of my website. The prior day's set ups for potential trading levels highlighted in the report are available on the Daily Forecast page of my web site along with a new report showing the prior day’s support & resistance levels.