The EURJPY has rallied from a temporary bottom in 131.60 zone and now it is rallying towards POC. This time POC is a neckline of inverted Head and Shoulders pattern type 2- “Inverted Head and Shoulders leaned” .133.30-20 zone is the zone where we should watch for rejections or a breakout to the upside. EURUSD is highly correlated to EURJPY and that is why we need to watch 2 potential scenarios with EURJPY. If you remember my EURUSD analysis from Friday, the pair is currently dropping from POC which also has an impact on EURJPY. As you can see from this excellent Correlation Table (the tool which is a MUST for a serious trader) EURUSD and EURJPY have +94 correlation on last 200 H4 bars, which is considered a highly positive correlation and these pairs are moving roughly in the same direction. Assuming that EURUSD continues to fall , EURJPY will also reject from POC.
Any rejections from POC should target 132.05 initially and any H4 close above POC should target 133.95. POC (H3, neckline) is 2 way directional this time and pay attention to rejection (trend) or breakout (counter trend).