EUR/JPY 4H Chart 11/27/2012 9:25AM EST
Breakout swing: The EUR/JPY has recently made some key bullish developments, including breaking above a major falling trendline that went back to the 2011 high of 123.30. Before we target this level, the 2012 high at 111.43 is the target. (108.00 pivot is a shorter term target/resistance pivot as well). However, before all these bullish aspirations, the EUR/JPY appears to be exhausting in the short-term and may be due for some consolidation/correction.
Retracement target: Looking at the 4H chart, we see the market topping after a bearish divergence. This could result in the first consolidation of any significance since the rally from Nov-low of 100.32. If the EUR/JPY falls below some near-term support and below the 106.00 handle, it is likely topping for some correction. The 38.2% retracement is at 104.52, which is near a previous resistance pivot, that can be monitored as support. More aggressive retracement targets include the 50% at 103.72, and 61.8% at 102.92.
Breakout continuation: If the market does retrace 50-61.8% of the breakout swing, it might actually present a good area to go long under the breakout-pullback trading strategy. But will the market offer a retracement this deep?