(MENAFN- Daily Forex)

• The euro initially rallied against the Japanese yen during trading on Monday but has turned around to show signs of weakness again.
• The ¥176 level seems to be an area that's a bit of a magnet for price, but the most important thing to pay attention to on the chart is the fact that there is a massive gap underneath current pricing that could come into the picture to offer a bit of support.
• Furthermore, the 50 Day EMA sits at the ¥174.22 level and is rising, so that does give us a little bit of support there as well.

Trend Continuation

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We have been in an uptrend for some time, and I do believe that it will continue eventually, and that each pullback does tend to offer a bit of support and, more importantly, value. Ultimately, the Bank of Japan is in a situation where it probably cannot do much, at least not enough to turn the markets around. While we could fall in order to fill the gap, meaning that we could drop all the way back down to the ¥173.25 level, I still think there are plenty of buyers between here and there to at least cushion the fall, and then eventually turn things around. Ultimately, this means that I have no real interest in shorting this market, despite the fact that it does seem like it is struggling a bit in this general vicinity.

EURUSD Chart by TradingView

With all of that being said, this is a market that I think eventually has to deal with the 170 Ian level, which is an area that has acted like significant resistance. If we can break above that level, it would obviously be very bullish, and it could send this market much higher. In that environment, I see the ¥180 level as being very likely, perhaps even higher than that. Remember, this doesn't have much to do with the euro and everything to do with the Japanese yen. This pair will move in the same direction and overall attitude as many other JPY-denominated markets.

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