EURJPY On Watch
Price action in EURJPY is looking interesting to the long-side here. Following the reversal lower from the failure at 143.80, price has since traded back down to test the 137.74 level and the rising trend line from YTD lows. Yesterday’s reversal saw a bullish pin bar form at what might prove to be the right shoulder of a large inverse head and shoulders pattern, suggesting room for a continuation of the longer-term bull trend. Bulls can look to trade a break of the 140.82 level targeting 143.80 initially and 149.83 as a longer-term target. Retail market currently around 60% short so there is plenty of room for this to build if we start moving higher.
Keep an Eye On
The lack of follow through on the BOJ intervention last week suggests the market doesn’t buy into the central bank’s ability to keep JPY propped up while also maintaining negative rates. Near-term, risk flows likely more important. If we see any pull-back in USD this week, that would be helpful for risk markets, helping driver the pair higher. However, if risk sentiment deteriorates again, JPY likely to gain against EUR negating the bullish outlook here. One to watch.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.