EURJPY: EURJPY weakened for a third week in a row holding below its psycho level at 130.00 to test a low of 126.09 before reversing part of those losses to close at 128.27.A hammer candle has now formed following its bounce off its strong support s at its Mar 30'09 low at 126.41 and its Mar 26’09 high at 126.09.A follow through higher on that hammer formation is now expected for confirmation and if that occurs, further recovery will shape up towards the 130.00 level followed by its Oct 30’08 high at 131.06/range top with a breach of there bringing further upside gains towards the 134.33/53 area, its Mar 24’09/April 13’09 highs enroute to the 137.42 level, representing its April 06’09 high. On the other hand, a failure to follow through will turn focus to the 126.41 and 126.09 levels where cap is expected again. Below there if seen should pave the way a move towards the 122.12 level, marking its Mar 12’09 low and may be even lower. This downside view is consistent with its current weakness activated at the 137.42 level in early April’09. On the whole, although respite might be coming the pair’s way, it remains biased to the downside following its weakness off the 137.42 level

Support Comments

126.40 Mar 30’09 low

122.12 Mar 12’09 low 131.06

120.01 Feb 09’09 high

Resistance Comments

127.65 Mar 13’09 high

129.72 Dec 29’09 high

131.06 Range top

Daily Chart: EURJPY