Yesterday's speech by ECB President Mario Draghi in Frankfurt didn’t have any effect on the EUR currency, which only declined a little in a correction wave after last week's rally. The EUR declined against the USD even at this current hour but went back to rise again against the JPY and is now trading at 122.50.
The EUR/JPY currency pair found a resistance area after a 2-week rally after it touched the downside trend line which started on December 15. It is now trading below it and below a key resistance area at 123.20. The pair has formed a bearish chart pattern, so we can predict the down wave in the next trading hours. When it moves down we would have a key support moving area at the SMA. The MACD indicator gave us the sell signal yesterday after the pair declined but the Stochastic is still up and ahead of 80 level.
The Next Few Days
From this analysis we can sell the pair now at 122.50 after it formed the bearish candle last week and another one yesterday as well. We can keep our first target at 121.50 and the second at 50% Fibonacci at 120.50 - that is in case the pair is still trading below 123.20, but if it breaks it we can buy the pair and make our profit 124.40.
We have to be careful about the upcoming hot news like the BOJ Policy Rate and policy statement on Thursday from Japan and any result for G20 on Friday.
