JPY crosses/Trade Ideas

EUR/JPY likely to be the key during Asian trade; important support close-by.

Let’s have a good look at EUR/JPY to start the day. The daily chart is in a clear down-trend after a 5-wave move from 111.40 to 94.10 so we should be in rally-selling mode there. Nevertheless the 50% retracement has been breached implying that further gains and the 61.8% retracement level at 104.80 remains a possibility. The up-move clearly accelerated as soon as it broke above 99.00 so this level become the first major support point.

The shorter-term charts are in bullish mode but are retracing after highs were posted at 103.80. The 38.2% retracement of 99.50/103.80 comes in at 102.20 and this level is trying to form a short-term base. If this level breaks, we should see a minimum move to 101.15 and possibly even 100.50.

Conclusion: This pair is offering excellent two-way trading opportunities and should be watched closely. Both the long-term down-trend and the short-term up-trend are quite strong, another good sign for trading opportunities. I’d play 100.50/105.00 over the coming weeks and we may be able to get aggressive near the edges.

  1. Hi Sean,

    Agree on your analysis. We have room to run to the downside till faced with 101.30. Id like to see bearish outside day (from NY close perspective) lows at 102.10 taken out though, then we can expect the 70/80 run to the downside. If decisive break from there, then 100.50 comes into play, agree..

  2. It has formed right at the 50% fib retrac from March-July fall, which to me strengthens even more prospects for bearish case. Not forgetting that context is still a ‘buy the dips market’, so tight risk management a must… 😉

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