Daily Price Action

EURJPY a Better Option for Sellers Than EURUSD?


It’s no secret that things look bleak for Greece. Deal or no deal, things are likely going to get worse before they get better. This unrest can be seen in the price action through the recent break below the 1.1050 key support handle for EURUSD.

However those looking to play off any Euro weakness will likely see more follow through with EURJPY, a pair that has also shown weakness recently and broken through several layers of support.

Why favor the Yen over the US dollar?

Without getting too distracted by underlying themes, as global uncertainties grow the Yen tends to appreciate as investors are attracted to its safe-haven status. The same idea applies to the US dollar, which also benefits from a risk-off environment, however the Yen often outperforms the USD in this category.

That said, the price action on the higher time frames is all we really need to make our trading decisions. And after an impressive 1,500 pip rally between April and June, EURJPY looks ready to resume the downtrend that began last December.

With the pair currently hovering between support at 133.10 and resistance at 135.10, those looking to trade EURJPY will likely need to wait for a more favorable entry.

Note: This pair is prone to weekend gaps of late and this weekend may not be an exception. Therefore take caution selling this pair late in the week to avoid getting caught on the wrong side of a gap at the open. 

Summary: Wait for a daily close below 133.10 and then watch for a retest as new resistance. Alternatively, watch for bearish price action on another retest of resistance at 135.10. Support below 133.10 comes in at 131.50, 129.00 and 126.85.

EURJPY break of ascending channel on the daily chart

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Vermillion says

No kidding. I generally trade the ninja or the geppy for the japanese yen, but as of late, my trades in eur/jpy seem to be outperforming all other currency pair, including the geppy (the previous breadwinner for my trades).

It probably has a lot to do with the clusterfuck situation between the US and Europe, what with recent ECB programs, Grexit + Tsipras, underwhelming short/mid term data from the US, etc.

I still see the yen being devalued in the immediate long term (for the overall duration of next year or two).

Benson Ang says

Thanks for your tips Justin! very much needed! All your key pointers on EURJPY CADJPY & NZDJPY are all in the $$$ for me. Really unbelievable!!

During this GREECE crisis period, JPY seems to be a safe-haven, even stronger than the GBP & USD. Amazing flight to quality movement in the $$ currency market.

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