This week our consideration will be focused on the ECB and BOJ presidents after the EUR/JPY currency pair has traded for seven weeks between the last highest level and the 23.6% level from the large wave from 114.84 to 125.74.
In our last article about the pair we showed two scenarios for the pair's movement. We forecasted that the downside scenario will happen and this turned out to be true. We sold the pair at 124.50 and it achieved our target at 123.30.
After the pair broke the upside trend line two weeks ago, the pair is still trading below it and retesting it. We predict it would decline further this week, that is in case the pair is still below the trend line. We have a key resistance area at 125.25 - maybe the pair can’t break it up; we can sell the EUR/JPY and the Stochastic indicator is trading at 78 level, giving us the sell signal for the next trading hours.
The Next Few Days
We can sell the pair at the current level below the uptrend line at 124.87 and keep our first target at the moving average, maybe at 124.40 and after breaking it, we can keep the second target at 123.30. We expect the pair will decline further to 50% next month, but if the pair breaks the last top at 125.74, we will close the sell positions and open buy positions.
This week we have much hot news from Europe like the ECB President Draghi's speech today, tomorrow and Wednesday, as well as the BOJ Gov Kuroda's speech on Wednesday too, so we have to be careful this week.
