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The Euro traded a touch higher against the Japanese yen recently and tested the 146.50 resistance zone. The EURJPY pair is now correcting lower and looks set to provide one more buying opportunity in the near term. The Euro zone trade balance data is scheduled for release in an hour or so, which is expected to register somehow better reading this time. There is a chance that we might witness some swing moves in the EURUSD and EURJPY pair in the short term. However, there is no such reason for a trend change for now, and that is the reason why buying the EURJPY pair looks like a good option.

please see chart attached ad post image

There is a monster bullish trend line formed on the hourly chart of the EURJPY pair, which might act as a solid support for the pair. The pair recently bounced from the mentioned trend line and currently testing the 38.2% fib retracement level of the last drop from the 146.52 high to 144.84 low. There is a chance of a spike towards the 50% fib retracement level where the Euro sellers are likely to appear to push the pair down again. In that situation, the trend line support area might come into play again. The hourly RSI has closed back above the 50 mark, which can be considered as a bullish sign in the short term.

Alternatively, if the EURJPY pair fails to hold the bullish trend line and breaks lower, then a retest of the 100 moving average is possible moving ahead.

Overall, one might consider buying dips as long as the highlighted trend line holds.

Posted By Simon Ji of IKOFX