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  • EUR/JPY has been a grind to the downside and lower bounds of the sideways daily channel.
  • Daily bearish engulfing tilts bias to the downside. 

EUR/JPY is trading at 125.95 within a 14-pip range in the Tokyo open where see some slightly more volatile price action has triggered a take profit on an overnight trade setup, (see below and here EUR/JPY Price Analysis: Bears seeking an extension to channel support).

Meanwhile, the pair has otherwise been in the hands of the bears for the most part in overnight trade.

The cross ended the day in the red having travelled between a high of 126.59 to a low of 125.90. 

In USD/JPY, the pair’s downtrend is exerting itself and the trend lows of 103.18 are at risk. Whereas in the euro, the single currency has been defying gravity but risks are tilted to the downside below 1.2158 point of control with risk of a double-top. 

Fundamentally, however, the sentiment conflicts with the technicals.

Overnight, stocks and commodities climbed, while Treasury yields moved higher.

The summed up the mood as it fell in a classic risk ‘on’ markets;.

There is ongoing optimism towards a US government stimulus package, the coronavirus vaccine distribution and with the Federal Reserve expected to stick to its dovish stance later today Wednesday.

Strong US manufacturing data also underpinned sentiment.

A positive lead for Asian markets also comes in Brexit talk progress whereby British lawmakers are expecting a deal,  with bookmakers in agreement.

Nevertheless, against such bullish odds, EUR/JPY is bearish and has just completed a take profit on analysis and a day trading setup from the New York session.

New York session’s analysis

1-hour chart analysis:

15-min analysis and setup:

Tokyo take-profit achieved

15-min outcome: