Forex: EUR/JPY rally hits 120; set for pullback toward 116? (San Francisco) - EUR/JPY gained further ground Monday, peaking at a near 2-year high of 120.10 before closing the North American session around 119.70 vs. 118.95 late Friday. “EUR/JPY has steadied below 120.00 and it may well sit back and have a consolidative rest and allow the crosses some share of the limelight,” says Sean Lee, Managing Director of FXWW. “The 4-hour chart is trying to form an interim top near the important psychological level of 120.00 and there seems to be scope for a possible retracement towards 116.00.”

Should the cross manage to pull back toward the mentioned 116 level, price must first take out bids around the 9-day EMA and 78.6% Fibo support (today circa 117.10). Further upward extensions would next target the 121.30 mark (Aug 1997 low), then 123.60 (100-month EMA).