EUR/JPY Strategy: Double Top May Be in the Works
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- EUR/JPY Strategy: Short at 123.75
- Euro may be forming double top near 124.00 vs. Japanese Yen
- Short trade triggered, looking for a decline below 123.00 mark
The Euro stalled at familiar resistance near 124.00 against the Japanese Yen having retraced all of the losses sustained since the beginning of the year. Candlestick positioning and negative RSI divergence hint that a reversal downward may be in the cards, forming a double.
The first significant layer of support comes in at 122.27, the 23.6% Fibonacci retracement. A break below that on a daily closing basis exposes trend line resistance-turned-support at 121.42, followed by the 38.2% level at 120.85. Resistance is in the 124.09-56 area (December 15, May 8 swing highs).
Positioning appears compelling and a short position has been activated at 123.75. The trade initially targets 122.27 and a stop-loss has been set to trigger on a daily close above 124.56. Profit on half of open exposure will be booked and the stop-loss trailed to breakeven when the first objective is attained.
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