Forex: EUR/JPY flirting with 123.00; 30m 20-EMA attracts dip buyers
FXstreet.com (Barcelona) - The market continues to push the Yen deeper into its own black hole, with the last spike in all Yen crosses taking the EURJPY just a whisker away from 123.00. A fresh high has been set at 129.90 from 129.35 NY close. The pair, as FXWW Sean Lee highlights, is well over 20% in 10 weeks.
Sean expands: "Once again we have to look to the long-term charts for resistance levels and the obvious place to target is a 38.2% retracement and previous highs near 123.00. Whilst the Yen selling has reached extreme levels, the EUR market is still at pretty neutral positioning levels so it could still have a way to go."
Technically, just like last week's AUDUSD vs 30m 20EMA relationship, in the EURJPY pair we can also observe an ongoing pattern commanding the price higher using the same indicator.
Since the take-off from 117.50 on Jan 23, the 30m 20EMA has served as an accurate predictor of when dip buyers will be keen to re-join the uptrend. See Jan 24 118.50 pullback, Jan 25 120.70 and 122.35 for examples. What this pattern translates into? As long as the indicator holds, further upside resolutions are on the cards. On the downside, short-term contrarian traders should burst through 122.15, sequence of lows, to potentially target 121.60.
Sean expands: "Once again we have to look to the long-term charts for resistance levels and the obvious place to target is a 38.2% retracement and previous highs near 123.00. Whilst the Yen selling has reached extreme levels, the EUR market is still at pretty neutral positioning levels so it could still have a way to go."
Technically, just like last week's AUDUSD vs 30m 20EMA relationship, in the EURJPY pair we can also observe an ongoing pattern commanding the price higher using the same indicator.
Since the take-off from 117.50 on Jan 23, the 30m 20EMA has served as an accurate predictor of when dip buyers will be keen to re-join the uptrend. See Jan 24 118.50 pullback, Jan 25 120.70 and 122.35 for examples. What this pattern translates into? As long as the indicator holds, further upside resolutions are on the cards. On the downside, short-term contrarian traders should burst through 122.15, sequence of lows, to potentially target 121.60.
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