Although consolidative to corrective price activities have started to shape up after EURJPY declines to a low of 112.09 was rejected on Wednesday last week, the cross continues to maintain its medium bearish tone triggered off the 169.97, its July'08 high
In Oct'2000, EURJPY bottomed out after a two-year of declines beginning in Oct'1998 ended at the 89.59 level (monthly charts) and triggered an upside recovery with a combination of a hammer and another rejection candle driving the cross higher for three years terminating at the 140.91 level in May'03.This price development thought to be a brief corrective pullback due to the strength of its preceding uptrend expanded into a three-year of ascending triangle which finally gave way in Mar'06.Having cleared its triangle pattern, EURJPY resumed its uptrend started at the 89.59 level pushing strongly higher to achieve another high at the 168.96 level, its July'07 high. With a new top printed, the cross embarked on corrective pullbacks and later ended that correction to retest and surpass the 168.96 level to print its highest price since 1992 at 169.97 in July'08.Attempt to close above this high failed as another corrective pullback ensued with EURJPY cutting through its consolidation low at the 149.29 level (Aug'07 high) and its monthly major emas (50 & 200) to achieve its sharpest monthly and worst monthly (16.29%) declines since its inception. This weakness also took out its 2003 to 2006 triangle consolidation lows (131.32 & 124.17) and printed its lowest price since Mar'02 at 113.63 in Oct'08.
Figure 1: Weekly Chart