This month the euro has moved against the Japanese Yen within around 370 pips. Although the prices broke the price channel down, the pair didn’t decline a lot this month and it returned back to trade now at 130.75 around this month’s opening price. In our last report we recommended to buy the pair around 130.73 and the pair is back now to the same levels - it didn’t hit our target, so we can close our previous order now and think about another opportunity.
The EUR/JPY pair broke the channel down and retested it, and the sell signal is still valid. Although it rose to test the key resistance level 131.38, we can keep our negative vision for the pair; that is in case it is still trade below the resistance level. We can wait for the Stochastic indicator at 96 level to cross over to sell the pair.
The Next Few Days
Based on this simple analysis of the pair after breaking the channel we would wait for a sell opportunity. Once the prices break the moving average down we would sell the pair, perhaps around 129.40. We would keep our first target at 126.24 and the second one at 122.35, that is in case the pair is still trading below the resistance level 131.38.
This week the market does not offer much in terms of hot economic news from the European Union or Japan but we have to be careful about the American employment change and the jobs report on Friday.
