The USDJPY has run into resistance at 111.391 and pulled back to the 110.838 level. A drop under this area can result in a retest of support at 110.000 but there is the falling red trend line to deal with first. It is possible that a retest of this trend line will be successful and drive price higher to 112.000. The 50 period MA is rising at 110.364 in close proximity. A loss of this supportive area would target 109.775 initially and the 100 period MA in order to retest resistance with a second leg lower to 109.000 and the 200 period MA. Further support can be found at 108.650 and 108.500.
A move towards 112.000 has blocking resistance at 111.450 to overcome but this level seems to be quite weak. Price can consolidate around 112.000 for a time as a result of the large rally the pair has had from 104.500 over the last two months. A bullish move over this area would likely look to test 113.400 and the 114.000 with 115.000 a major target in extension.
USDJPY 4 Hour chart
EURUSD
The EURUSD pair has been rocked by the result of the Italian election and the forming of a right of centre Coalition Government. The proposal is to cut taxes, increase spending and generally drop the imposed EU fiscal rules. The pair has lost ground after breaking down from a bear flag last week at 1.19350 finding support at 1.17152 and now retracing higher to test 1.18170 and the 50 period MA at 1.18400. A loss of the lows targets 1.17000 followed by 1.16600. The 1.16000 level can also support price with the 1.15515 area a significant swing low from November 2017.
Resistance at 1.18200 is holding for now but a drive to the 100 period at 1.19160 could result in an attempt of the 1.20000 level. This level was retested as resistance on the 14th of May and with the 200 period MA falling to meet it, the area can become quite strong. Should the level hold if retested a move down to new lows could be forecasted, however a failure of resistance and a move higher could result in a rapid short squeeze towards 1.21000.
