The EUR/JPY pair fell during the course of the session on Friday, but as you can see we have been consolidating recently, and the red line at the 138 level has in fact offered support for some time now. This being the case, I believe that this market will continue to bounce around in this general vicinity, and the fact that we fell during the session on Friday has a very little bearing and what ultimately happens in this market. After all, you can see that there is a significant hammer that formed at the 138 level just a week ago, and I believe that’s a sign that the buyers will continue to step in.

Because of this, I will be looking for some type of supportive candle closer to the 138 level to turn around and start buying again. I believe that this market will eventually break out much higher, but in the meantime I think it’s going to be more or less short term trading waiting to happen.

Massive base formed at the 138 handle.

There has been a bit of a massive base formed at the 138 handle, as we have struggle to break down below there, and as a result I believe that this market will not break that area for any significant amount of time. However, even if we did break down below that level, there should be a significant amount of support all the way down to the 135 handle. It’s not that I can see shorting this market below the 138 level, it’s just that you will have to be careful if you do in fact start selling.

I would prefer to buy this market, and I believe that ultimately the next target should be the 140 level, and I think as long as the markets are in the same type of attitude, we will be able to buy this market over and over, taking small gains and possibly even staying like that for most of the summer as there’s real no catalyst to change the attitude of the market overall.


Related Articles
  1. Personal Finance

    5 (Mostly) Costly Exotic Pets You Can Legally Own

    Exotic pets can be fascinating to look at, but most are expensive to acquire and maintain. And avoid being bitten, especially if you get a scorpion.
  2. Investing Basics

    What Does Plain Vanilla Mean?

    Plain vanilla is a term used in investing to describe the most basic types of financial instruments.
  3. Economics

    Explaining Manufacturer’s Suggested Retail Price

    The manufacturer’s suggested retail price (MSRP) is just what it describes – the price manufacturers recommend that retailers charge for their goods.
  4. Economics

    What Happens in a Make-or-Buy Decision?

    A make-or-buy decision happens when a company must choose to either manufacture an item itself, or buy it premade from a supplier.
  5. Insurance

    Explaining Indemnity Insurance

    Indemnity insurance is an insurance policy that protects business owners and employees from losses due to failure to deliver expected services.
  6. Investing Basics

    What Does In Specie Mean?

    In specie describes the distribution of an asset in its physical form instead of cash.
  7. Insurance

    What is a Force Majeure?

    A force majeure clause frees both parties in a contract from fulfilling their obligations in the event of some catastrophic or unexpected occurrence.
  8. Credit & Loans

    Explaining Equated Monthly Installments

    An equated monthly installment is a fixed payment a borrower makes to a lender on the same date of each month.
  9. Economics

    Calculating Days Working Capital

    A company’s days working capital ratio shows how many days it takes to convert working capital into revenue.
  10. Economics

    Calculating Cross Elasticity of Demand

    Cross elasticity of demand measures the quantity demanded of one good in response to a change in price of another.
  1. Can I borrow from my annuity to put a down payment on a house?

    You can borrow from your annuity to put a down payment on a house, but be prepared to pay an assortment of fees and penalties. ... Read Full Answer >>
  2. Why is the Cayman Islands considered a tax haven?

    The Cayman Islands is one of the most well-known tax havens in the world. Unlike most countries, the Cayman Islands does ... Read Full Answer >>
  3. Can mutual funds invest in hedge funds?

    Mutual funds are legally allowed to invest in hedge funds. However, hedge funds and mutual funds have striking differences ... Read Full Answer >>
  4. Why is Luxembourg considered a tax haven?

    Luxembourg has been the tax haven of choice for many corporations and mega-rich individuals around the world since the 197 ... Read Full Answer >>
  5. Who decides to print money in Canada?

    In Canada, new money comes from two places: the Bank of Canada (BOC) and chartered banks such as the Toronto Dominion Bank ... Read Full Answer >>
  6. What are the main kinds of annuities?

    There are two broad categories of annuity: fixed and variable. These categories refer to the manner in which the investment ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!