Although concern over the European financial situation may not be dying down anytime soon, a short term reversal in Euro fortunes may be around the corner.  This may be especially true for the EURJPY currency pair.  The cross pair has fallen by almost 4% since the beginning of the month, currently trading just above support levels at the 104.00 psychological level – forming a potential medium term double bottom formation.

If there is no break below the 104.00 (in the hourly time frame), the EURJPY currency pair could find buyers to support a move higher to the 105.52 resistance barrier – a level not tested since September 14th.  But, the currency pair would need to break through short term resistance at 105.00.  This level is key as it has not been overtaken over the last week or so, and could actually serve as another reason for the pair to sell off, if there isn’t much buying momentum.

On the other hand, a penetration below the 104.00 would be historic as the currency pair could drop to levels not seen in almost 10 years.