EUR/JPY technicals: Bullish but seriously overbought
This is a common problem we face when a bull trend is taking control but a pair gets overbought and is always liable to nasty reversals. It may well continue higher towards 111 but I think the more likely scenario is that resistance level like 107.35 and 107.95 take a toll and we get some consolidation or reversal. The onus is now on the bears to try and wrest control back so I would not be piling into large short positions anytime soon, rather preferring to probe with small ‘testers’ and if the technical picture looks like its changed then start trading more aggressively. This pair could fall back towards 103.00 and still be in an uptrend.