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EUR/JPY: Short Term Consolidation Puts Pair at Important Crossroad

The EUR/JPY is at an important crossroads. After rallying into the end of the year, the pair has fallen back, probing the area below 142.

  • However, after falling below the 142 pivot the pair has recovered, and put in a bit of an inverse head and shoulders in the shorter timeframe.
  • Overnight the EUR managed to clear resistance around 142.80, but was unable to hold it in the short term.
  • So, here's the key question.
  • Is the recent action a bottom to the short term decline, with the pair ready to make a move back above 143, and make a run towards 144.40?
  • Or, is this simply a break and retrace of the downswing that will be followed by a sustained move through the 142 handle, towards the lows set in mid-December at 141?
  • The answer should be provided in today's session.