EUR/JPY in Free Fall Ahead of BoJ- Bearish Sub 134
- EUR/JPY breaks below monthly open- short scalps target key support
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
- EURJPY breaks below monthly open / opening range- Bearish
- Targeting 61.8% retracement at 131.80 & key support confluence 131.23
- Shorts favored below today’s high at 133.54- bearish invalidation
- Breach above monthly open at 133.97 needed to shift focus higher
- Daily RSI support trigger break / break sub-40 – bearish
- Key Event Risk Ahead: Japan Industrial Production tonight and Jobless Rate & CPI on Thursday followed by the BoJ
Notes: EURJPY is trading within the confines of a well-defined descending pitchfork off the October 14th high with today’s FOMC sell-off rebounding off the median line into the close of U.S. trade. The focus remains weighted to the downside while within this formation / 133.54 with a near-term support confluence seen just lower at 131.80. Key support rests with the 100% extension of the decline off the June high at 131.23.
Bottom line: looking to sell rallies / short triggers while below today’s high with a breach above 133.89/97 needed to shift the focus back to the long-side of the pair. A quarter of the daily ATR yields profit targets of 25-28pips per scalp. Caution is warranted heading into the end of week / month with key data out of Japan & the BoJ monetary policy decision likely to fuel added volatility in yen crosses.
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Relevant Data Releases Next Week
Other Setups in Play:
- GBPJPY Shorts Favored Ahead of Major Event Risk
- USDCAD Risks Reversal Below 1.3150 on Canadian CPI
- EURCAD Bulls Brace for ECB- Rally Vulnerable Sub 1.4955
- NZDCAD Posts Outside Day Reversal Pre-BoC; Shorts Face 8700 Hurdle
- Webinar: ECB/BoE Playbook- EUR/GBP Shorts Target Key Support Zone
---Written by Michael Boutros, Currency Strategist with DailyFX
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