EUR/JPY Strategy: Down Trend May Be Resuming After Bounce
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- EUR/JPY Strategy: Short at 124.03
- Candlestick setup hints Euro down trend vs. Yen may be resuming
- Short position looking for decline to test 123.00 figure once again
The Euro put in a bearish Dark Cloud Cover candlestick pattern after testing critical resistance, hinting a move lower against the Japanese Yen may be ahead. The reversal follows a test at the intersection of recently broken neckline support and the upper bound of a month-long down trend.
From here, a daily close below resistance-turned-support at 122.89 opens the door for a challenge of the 38.2% Fibonacci retracement. Alternatively, a push above the June 20 high at 124.65 sees the next major upside barrier at 125.82, a double top.
Risk/reward parameters appeared acceptable and a short EUR/JPY position was activated at 124.03. The trade initially targets 123.01, with a stop-loss to be triggered on a daily close above 124.65. Profit on half of exposure will be taken and stop moved to breakeven upon hitting the first objective.
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