EUR/JPY Into the Gauntlet- Chasm of Support Awaits
- EUR/JPY breakdown coming into initial support targets post-BoJ
- Updated targets & invalidation levels
Chart Created Using TradingView
Broader Technical Outlook: EURJPY broke key support & bullish invalidation noted last week at 114.57/64 where the 50% retracement of the monthly range converged on the July open. The region has continued to serve as resistance with the decline now approaching near-term support structural support.
Note that daily momentum is sitting at 40 & the immediate short-bias is at risk near-term while above this trendline. A breach above basic trendline resistance off the July high is needed to shift the broader focus back to the long-side.
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Notes: The pair has continued to trade within the confines of a well-defined descending channel formation extending off the July highs with the immediate short-bias at risk while above 113.13. Interim resistance now stands at 113.82 backed by the weekly / monthly open at 114.29. A breach above the weekly opening range high is needed to validate a more significant reversal in the pair.
A break below this level targets the 61.8% retracement at 112.73 backed by a critical median-line confluence at ~112 – Both areas of interest for possible exhaustion / long-entries. A quarter of the daily average true range (ATR) yields profit targets of 44-48 pips per scalp. Caution is warranted heading into Eurozone retail sales tomorrow with the release likely to fuel added volatility in EUR crosses. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount.
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Relevant Data Releases
Other Setups in Play:
- AUDUSD Vulnerable to RBA - Technicals Remains Constructive Above 7495
- USDOLLAR Heavy on GDP- Monthly Opening Range to Hinge on NFP
- U.S. GDP Game Plan: EUR/USD Rebound Looks to Data for Fuel
- EUR/JPY Primed for BoJ - Levels to Know
- AUD/NZD Correction Underway Ahead of RBA- Look to Buy the Dip
Looking for trade ideas? Review DailyFX’s 2016 3Q Projections
---Written by Michael Boutros, Currency Strategist with DailyFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.