FOREX Chart Of The Day: Will EURJPY Break Lower?
Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, head currency analyst.
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In this video, we’re going to take a look at EUR/JPY. I like the idea of looking for some short opportunities on this market, and the reason being is the stock markets are starting to fall.
So if I just go to the S&P 500, for instance, we can say the market is starting to pull back, and if it goes to that weekly time frame, we can see that we had a really nice bearish close.
Looks to me like we could be pulling back into the previous weekly highs, which is all the way down into sort of these 320-3200 sorts of areas.
So, looking for the potential for the market to drop back into here. And what that would suggest is a risk-off movement, okay.
So the market falling, risk-off currencies will gain strength, and that kind of goes hand in hand with regards to Dollar moving higher in line with that seasonality that we look at.
The Yen, potentially gaining some strength, and the other risk currencies losing strength. So we’ve seen CAD, for instance, lose strength as well.
So what I’m looking for really is Yen trades to potentially trade it against weaker currencies. Could look at CAD/JPY for the potential move just through here. But I do quite like the look at the way EUR/JPY set up. Especially in this weekly time frame.
So just looking at this, you can see the market has rallied on numerous occasions, and broke through the highs, and closed back below. The RSI is also in an overbought condition, so that gives me a little bit of a confluence that we could see is some short-term downside to the market.
The area that I like for the market to kind of re-test is around about this 123.70 area. We could even stretch that up into sort of the 124, as it’s a psychological level. I’m looking for some potential downside in here.
Now just look at the daily we can see technically, obviously, we’re in an uptrend, okay. And what I want to see is the market kind of break down a little bit further.
So if I go into the four-hour time frame, what I’m actually looking for is a potential break and close below this low just through here, okay. So when we look at this, looking for the market to break close below. Look for a pullback in at that point, okay.
So just moving down, you can see the trend here, consolidation, a breakout will give us a lower low, which is what we want to see. If the market rallies back up, then look for the lower high, look for that continuation to the downside, okay.
So this is looking quite good. I like the idea of price going into that 124 on EUR/JPY. Keep an eye out on this one, and I’ll speak to you in the next video. Cheers.
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