The EUR/JPY pair fell over the course of the week, bouncing off of the 130 level in the end. We expect 130 to be supportive, so a supportive candle were to form in this general vicinity, we would be more than happy to start buying. However, the range is so tight at the moment that we feel this is more or less a short-term market. Of course, we see plenty of upside bias and therefore aren’t selling regardless. Below here, expect quite a bit of support at 128 and 125, with 125 being almost impenetrable.
As for the Monday 29th daily forecast:
The EUR/JPY pair had a very bearish day on Friday, slamming into the 130 handle. We lost 200 pips during the session, what we found interesting is the fact that the 130 level stop this fall dead in its tracks. That doesn’t happen very often, and will normally when it does it shows just how strong a supportive level is. With that being the case, this market looks like it’s ready to find a bounce from this level, and perhaps go quite a bit higher. We’re looking for supportive candles in this general vicinity, and will not hesitate to buy them as they appear.
This candle does look rather bearish, but the fact that the area could stop it is cleanly as it did really has us wondering whether or not this wasn’t simple profit taking at the end of the week that was exacerbating the downdraft. Because of this, we feel that this market will get picked up somewhere in the general vicinity, and because of that we are more than willing to start buying the Euro, and start selling the Yen. Going forward, we fully expect this market to hit the 133 level again, not to mention the 135 level and beyond.
As far as selling is concerned, it’s almost an impossibility at this point in time. This is simply because the 130 level has several hammers just underneath it, which of course is almost always a sign of significant support. Below there, one 28 level looks to be supportive as well, as it is where the bottom of those hammers are sitting. With that in mind, we are buying this pair and if you are a bit aggressive, and you could even start buying right now.
However, the more conservative trader will want to see some type of supportive candle formed before they go ahead and start committing their trading capital. Either way is fine, as we think the market has certainly settled on the direction it once the go over the longer term. We fully expect see 135 hit over the next couple of months, and are plain this pair as such.
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