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Euro Drops to 2-Month Low vs. Yen, Short Trade Hits First Target

Euro Drops to 2-Month Low vs. Yen, Short Trade Hits First Target

Ilya Spivak,

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Talking Points:

  • EUR/JPY Strategy: Holding short from 122.65
  • Euro slides to two-month low vs. Yen, short position hits first target
  • Partial profit taken, remaining exposure in play to capture down trend

The Euro accelerated lower against the Japanese Yen after over a month of sideways drift within a choppy congestion range, hitting the lowest level since early December. The move may suggest prices are finally ready to make good on a break of rising trend line support set from early November.

Near-term support is now at 119.49, the 14.6% Fibonacci expansion, with a break below that on a daily closing basis seeing the next major downside barrier marked by the 23.6% level at 116.66. Alternatively, a move back above support-turned-resistance at 120.54 (January 17 low) target a falling trend line now at 123.13.

A short position was activated at 122.65 when prices initially took out trend line support. The trade has now hit its initial objective at 119.77 and profit has been taken on half of open exposure. The rest remains in play to capture any follow-on weakness with a stop-loss adjusted to the breakeven level.

Why is EURJPY a top trading idea for 2017? See the fundamental strategy here.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.