I've been following the EURJPY pair the last weeks, and I think the pair presents some interesting signs for a retracement to around the 150.00 area, currently at ~123.00. If you've been following the news, the BOJ is turning up the volume on possible action being initiated if the yen continues appreciating at its current pace. Another important element for the appreciation of the yen has been risk aversion, which was initially sparked by the China slowdown. If you go by the published Chinese numbers, yes I know but just roll with it, we can at least conclude that the downwards spiral has stopped and that we are entering a possible China bounce. The US is not doing that bad, and neither is Europe. Even oil is stabilizing, and there has been more talk of oil hitting 40s than 20s the last couple of weeks. Point being, risk aversion might have peaked, and soon those risk aversion cover buys, will start to get cashed in.
If you look at the monthly chart:
You can see that we are about to enter an area that has shown a lot of long entry interest, I've marked this in the chart as the possible bounce zone towards the ~150.00 level. If the EURJPY would miss this chance to retrace, you are looking at nothing solid (a small ripple @ ~104.00 perhaps) in terms of indicators/resistance stopping an abysmal fall towards 92.00 - and I don't think anybody wants that, especially the BoJ. If there's going to be a nudge coming at any point between now and the yen crashing towards 92.00, its best shot seems to be that bounce zone starting around the 120.90 level.
Any surges might spark some heavy duty profit taking at and nearing every pivot point until we get around 149.00 - 150.00...after that, all bets are off, we'd need to recalibrate the analysis once we get there.
If I look at the yen's favorite indicator on the monthly, I see our cloud thinning out, and the outer resistance markers look ever closer. The fast moving average is still bullish, but not as committed as it has the previous weeks. I see the possibility of a reversal as long as we get a strong driving force wanting to appreciate the yen:
Anybody have EURJPY retracing to 150.00 in their radar?
If you look at the monthly chart:
You can see that we are about to enter an area that has shown a lot of long entry interest, I've marked this in the chart as the possible bounce zone towards the ~150.00 level. If the EURJPY would miss this chance to retrace, you are looking at nothing solid (a small ripple @ ~104.00 perhaps) in terms of indicators/resistance stopping an abysmal fall towards 92.00 - and I don't think anybody wants that, especially the BoJ. If there's going to be a nudge coming at any point between now and the yen crashing towards 92.00, its best shot seems to be that bounce zone starting around the 120.90 level.
Any surges might spark some heavy duty profit taking at and nearing every pivot point until we get around 149.00 - 150.00...after that, all bets are off, we'd need to recalibrate the analysis once we get there.
If I look at the yen's favorite indicator on the monthly, I see our cloud thinning out, and the outer resistance markers look ever closer. The fast moving average is still bullish, but not as committed as it has the previous weeks. I see the possibility of a reversal as long as we get a strong driving force wanting to appreciate the yen:
Anybody have EURJPY retracing to 150.00 in their radar?