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Last Friday, I wrote about a pending short setup on the EURJPY.
The idea will materialize following a daily close below the 116.00 support level.
The 116.00 area was a key factor toward the end of 2016, and it also supported the EURJPY last September and again last month.
My target following a close below 116.00 will be 111.40.
That 111.40 region has influenced EURJPY since the early 2000s.
Now, I also pointed out an immediate opportunity in Saturday’s Forex Forecast video.
The resistance area in question was 118.50.
As you can see from the chart below, EURJPY buyers ended up taking the pair above that level on Tuesday with a session high of 119.03.
However, if you’ve followed me for a while now, you know that I use the daily close at 5 pm EST to make decisions.
It’s why I’m always referring to the “daily closing basis” on this site.
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It’s also the reason I named this website Daily Price Action.
With that in mind, take a look at where EURJPY closed Tuesday’s session at 5 pm EST.
You should see a print of 118.47 or thereabouts.
Remember the 118.50 area I mentioned in Saturday’s video?
There’s a very good reason the EURJPY closed below that level and it has everything to do with the bottom of the ascending channel from March 9th.
After all, that is the year-to-date low.
Just this morning, I told Daily Price Action members in the forums that a break below a trend line near 118.20 would likely spur more weakness.
I remain short EURJPY since March 26th and have now added to that position twice.
My target remains 111.40 as long as sellers can clear 116.00 on a daily closing basis.
Only a close above the 119.00 area would negate the idea.