I have been short the EURJPY since March 26th.
The hammer that formed at the 121.15 resistance level signaled the end of an aggressive 500-pip relief rally.
And make no mistake, it was just a relief rally.
I can say that with certainty as the EURJPY has trended lower since early 2018.
Furthermore, the risk-sensitive pair gave up a multi-year trend line support that extends from the 2012 low.
That occurred in the middle of last year, and the EURJPY retested that level as new resistance last December and again this past January.
I was always interested in shorting the pair given that breakdown.
However, timing was everything, and it’s even more critical these days, given the massive influx in volatility.
But if you missed out on shorting EURJPY from higher prices, there’s no reason to think you’ve missed the move, in my opinion.
The price action since last September continues to signal weakness.
With the EURJPY testing that 116.00 support zone, a break lower seems almost inevitable.
And that’s where the next opportunity could materialize.
A close below that 116.00 support area would open the door to the next key support at 111.40.
If you take a look at the monthly time frame going back to 2000, you will see why 111.40 is my next target for EURJPY.
Just remember that sellers need to clear 116.00 on a daily closing basis first.
Until that happens, 116.00 will continue to serve as support.
Alternatively, a retest of the 118.50 area as new resistance could present an opportunity to get short next week.
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