EURJPY Intraday Strategy
Ahead of the European Central Bank (ECB) monetary policy meeting on Thursday Euro yen appears to be trending within a relatively right range on the 4hr chart.
We are favouring EUR recovery against a basket of currencies but we are abiding by the technical developments of EUR pairs and crosses. The last leg lower in EURJPY has re-tested the lower support of the 4hr chart, which may suggest corrective gains are due. As the markets are closed at the time of this writing we must bear in mind a gap (bullish or bearish) may occur at the opening of the Foreign Exchange (Forex) market
EURJPY 4hr Chart
Please click on the chart to enlarge:
EURJPY 4hr Chart 17/04/16
If a bearish gap takes place and re-tests 122.30 we would still expect the price to retrace higher. We should highlight 122.30 should only be used in a scenario of a bearish gap that tests the price level and not as a key support beyond the opening of the Forex market. The optimal scenario would be a re-test of the lower support (lower blue line).
122.95 may act as the initial resistance (or support of breached) in our intraday strategy for EURJPY and must be monitored in case it prevents stronger gains in the pair. If breached it may act as the nearest support level.
The longer EURJPY traders between the support and resistance (both in blue) the more possible entries it may provide. Traders may look to short EURJPY on re-tests of the upper resistance and long EURJPY on successful re-tests of the support. Although we are favouring a strong Euro at the time of this writing EURJPY must firmly break above the resistance to affirm the expected uptrend.
If Euro yen breaks above the resistance the initial target is seen at 124.15. The 100 Moving Average (MA) is the latter target upon a successful breakout of 124.15 but we believe it will take a substantial effort for Euro yen to reach the 100MA.
17/04/16 UPDATE: EURJPY gapped lower at the opening of the Forex market mainly due to the OPEC Doha meeting’s outcome (not outcome) and is trading slightly below the level we provided, 122.30.
Please click on the chart to enlarge:
EURJPY 4hr Chart II 17/04/16
This is a very tough call but we still see the possibility for EURJPY correcting higher as long as 122.00 holds. The Japanese yen is strong following the current risk aversion mode.
18/04/16 UPDATE: This was a fairly tough entry as EURJPY did trade several pips below 122.00 before reversing higher.
Please click on the chart to enlarge:
EURJPY 4hr Chart 18/04/16
Please note EURJPY has tested 122.95, the resistance level we highlighted in the intraday strategy.
19/04/16 UPDATE: EURJPY acquired the 124.15 target of the intraday strategy.
Please click on the chart to enlarge:
EURJPY 4hr Chart 19/04/16
There is a possibility the 100MA will be reached but the technical target has been acquired.
23/04/16 UPDATE: Reports that the Bank of Japan (BOJ) will opt for lower rates and possible more aggressive easing measures in it upcoming monetary policy meeting sent EURJPY into fresh highs, extending beyond the 100MA.
Please click on the chart to enlarge:
EURJPY 4hr Chart 23/04/16
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Last Updated on April 24, 2016