FX.co ★ EUR/JPY Bullish Above 115.71, May 13, 2011 (Daily Strategy)

EUR/JPY

The last wave of price drops was extremely sharp and it dropped the pair by over 750 points right to the strong support level of around 114.30. In effect, so long as this important level doesn't break downwards, the assessment is that in all probability the pair will reach the bottom and begin a new move upwards.

Regarding the chance/risk ratio, then a buy above 115.71 creates an excellent opportunity where the potential for a large price increase is as high as the size of the previous price drops. The resistance level of 119.20 can be used as a final target price for the realization of a long position on the pair.