Key Technical Levels
The EURJPYY has found support at the major support level of the 200-Day SMA which the pair has traded above since 5/21/09. Therefore, it may take a significant catalyst to push the pair below, limiting downside risks. The technical level is currently at 132.08 which is also a level that has held for the past month increasing the likelihood that the last of least resistance is higher. However, prevailing risk aversion is weighing on the pair and the potential stalemate between current momentum and the imposing barriers may create an opportunity to use scalping techniques.
Quantitative Metrics
The EUR/JPY’s declining ATR makes it attractive for scalpers but a Bollinger band width of 602 pips demonstrates that the pair is susceptible to volatility. A daily range of 166 pips remains one of the highest of the majors but its descent speaks of recent consolidation. Today we have seen the pair trade in a 116 pip range which still leaves the possibility of more movement but the recent retrace lessons the chances of a move below the intra-day low of 131.78.
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To discuss this report or be added to the email list, contact John Rivera, Currency Analyst: jrivera@fxcm.com
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