It’s no secret that EURJPY has been stuck in a downtrend for some time now. The series of lower highs followed by lower lows since June 2015 has been relentless. And if yesterday’s price action is any indication, the bearish momentum isn’t about to let up anytime soon.
The daily chart below illustrates the downward ebb and flow that has persisted for the last ten months.
Although the 125.30 handle prevented the pair from sliding even lower during yesterday’s session, there was a critical break that should be cause for concern for anyone with a bullish bias.
The level in question is trend line support that extends from the March low at 122.05. This level previously supported prices on the 9th and 22nd of March and should, therefore, act as resistance if tested as such over the coming sessions.
WE RECOMMEND THE VIDEO: Forex 96% Winning Strategy Revealed | Forex Trading 2020
Forex 96% Winning Strategy Revealed | Forex Trading 2020 NBA Strategy 2.0 Template: Trade With Us: ...
On the other hand, if the strength of the Japanese yen continues at its current pace, the chances are slim that we’ll see a move that high before the next leg down. For this reason, I’m partial to using the 125.30 level a way to identify a favorable opportunity to get short.
However, keep in mind that trading a break on the 4-hour chart is inherently more risky than waiting for a daily close below the level. Although EURJPY has respected 125.30 on a 4-hour basis fairly well in recent weeks, there was a false break on March 22nd.
Get FREE Access to Daily Price Action When You Open and Fund an Account With Blueberry Markets!
As always, the way you choose to trade these levels is dependent upon your style of trading and overall tolerance for risk.
Leave a Comment:
Disclaimer: Any Advice or information on this website is General Advice Only - It does not take into account your personal circumstances, please do not trade or invest based solely on this information. By Viewing any material or using the information within this site you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here by Daily Price Action, its employees, directors or fellow members. Futures, options, and spot currency trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to Buy/Sell futures, spot forex, cfd's, options or other financial products. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in any material on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.
High Risk Warning: Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work against you as well as for you. You must be aware of the risks of investing in forex, futures, and options and be willing to accept them in order to trade in these markets. Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results.