EUR/JPY in Free Fall Ahead of BoJ- Bearish Sub 134

Talking Points

• EUR/JPY breaks below monthly open- short scalps target key support
• Updated targets & invalidation levels
• Event Risk on Tap This Week

EURJPY Daily

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

• 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

EURJPY 30min

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.

For updates on this scalp and more setups throughout the week subscribe to SB Trade Desk

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

Follow Michaelon Twitter @MBForex contact him at mboutros@dailyfx.com or Click Here to be added to his email distribution list

Join Michael for Live Scalping Webinars on Mondays on DailyFX and Tuesday, Wednesday & Thursday’s on SB Trade Desk at 12:30 GMT (8:30ET)

Struggling with your strategy? Here’s the number one mistake to avoid