Market Condition: EUR/JPY Pending Breakout
Target 1: 115.27
Target 2: 111.95
EUR/JPY, Daily Chart with Yearly Low
(Created Using IG Charts)
The EUR/JPY has found support after declining as much as 526 pips so far for the 2017 trading year. As prices rebound from yearly lows at 118.59, traders may plan for the markets next bearish breakout. To do so traders may place entry orders to sell the market beneath the low, and use a daily ATR value of 83 pips to pinpoint stop and limit order placement. Traders may consider managing risk using 2X daily ATR, placing stop orders near 120.25. With 166 pips of potential risk, traders may consider a 332 pip profit target towards 115.27. This would create an initial 1:2 Risk/Reward ratio for a bearish breakout.
In the event that prices fail to breakout to new lows, traders may elect to simply delete any pending entry orders to sell the market. If prices do trade above 120.25, this would suggest that market momentum has at least temporarily changed for the EUR/JPY. In this bullish scenerio, traders may elect to wait for a broader retracement and further technical confirmation prior to initiating any new sell based positions.
--- Written by Walker, Analyst for DailyFX.com
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