Could EUR/JPY make a run at the Dec high?

It's been a very interesting couple of months for EUR/JPY. In early December the cross was rallying very strongly, breaking up through the 143 level. Then some good data came out of Japan and the market reversed course very rapidly, falling about 500 pips in basically two days. Since then, EUR/JPY has been trading fairly choppily. Early this month, the cross made a new relative low near 137, but could not sustain the move. It rebounded back above 138, and as we have seen lately, kept going up through 140.

The market is at a potentially critical point. As the chart below shows, EUR/JPY has reached the 141 level, which is the same level as the peak prior to the December highs.

As you can see, yesterday's move up to 141 took the cross just above the upper Bollinger Band. We are currently seeing a fairly predictable pull-back to get the market back inside the Bands. How things progress from here will decide whether EUR/JPY is going to make a run at those highs from last month, or whether we're looking at a move back in to the consolidation range - possibly even the completion of a head-and-shoulders pattern.

The hourly chart above shows the progress since the market broke out of the range it got in to toward the end of last week. The break happened when trading resumed in Asia Sunday evening. If EUR/JPY can stay above 140, then the prospects for the cross should be pretty bullish. The market may yet have to pull back to that mark to fill the gap which shows on the daily chart in order to finally be ready to move. As such, that could be a very good buying opportunity. Don't get caught waiting for a full pull-back that may not happen, though. If EUR/JPY can get above 141 and stay there, then the expectation has to be for a rally toward 143.

Note: For the sake of full disclosure it should be stated that last week I recommended EUR/JPY longs to the readers of my advisory, the Anduril Trading Report, and that the portfolio I manage for Anduril Analytics is long the cross as well.