Never miss a story from Michael Boutros

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Michael Boutros

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

In this series we scale-back and look at the broader technical picture to gain a bit more perspective on where we are in trend.Euro is up nearly 0.8% against the Japanese Yen since the start of the month with the recent price recovery now testing initial Fibonacci resistance. Here are the key targets & invalidation levels that matter on the EUR/JPYweekly chart.

New to Forex Trading? Get started with this Free Beginners Guide

EUR/JPY Weekly Price Chart

EUR/JPY Price Chart - Euro vs Japanese Yen Weekly

Notes: EUR/JPY rebounded off a critical support confluence early in the year at 123.36 where the 50% retracement of the 2016 advance converges on basic trendline support- (note that price respected this threshold on a weekly close basis). The subsequent recovery is now in its fifth consecutive week with price approaching initial resistance at the 38.2% retracement of the 2018 decline at 125.96.

A breach / weekly close above this threshold is needed to keep the immediate advance viable with such a scenario targeting more significant resistance at 127.4/66 – a region defined by the May low-week close, the 61.8% retracement of the September decline, and the 200-week moving average. Key support rests at 123.36/64look for a break of this key range for guidance heading into February trade with a topside breach ultimately favored.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Bottom line: The immediate EUR/JPY recovery may be vulnerable near-term sub-126 but the broader outlook remains constructive while above 123.36. From a trading standpoint, we’ll favor fading weakness while above this support zone targeting a breach of this range. Be on the lookout for downside exhaustion on a pullback to offer more favorable long-entries. I’ll publish an updated EUR.JPY Price Outlook once we get further clarity on the near-term trading levels.

Even the most seasoned traders need a reminder every now and then- Avoid these Mistakes in your trading

EUR/JPY Trader Sentiment

EUR/JPY Trader Sentiment
  • A summary of IG Client Sentiment shows traders are net-short EUR/JPY - the ratio stands at -1.24 (44.6% of traders are long) – bullish reading
  • The percentage of traders net-long is now its lowest since January 15th
  • Long positions are 1.1% lower than yesterday and 11.6% lower from last week
  • Short positions are 5.8% higher than yesterday and 12.6% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/JPY prices may continue to rise. Traders are further net-short than yesterday & last week, and the combination of current positioning and recent changes gives us a stronger EUR/JPY-bullish contrarian trading bias from a sentiment standpoint

See how shifts in EUR/JPY retail positioning are impacting trend- Learn more about sentiment!

---

Relevant EUR/JPY Data Releases

EUR/JPY Economic Calendar

Economic Calendar - latest economic developments and upcoming event risk. Learn more about how we Trade the News in our Free Guide!

Previous Weekly Technical Charts

Learn how to Trade with Confidence in our Free Trading Guide

--- Written by Michael Boutros, Technical Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex