Daily Price Action

EURJPY Breaks Key Support as Holiday Lull Begins


Like several other yen pairs before it, the EURJPY has broken key trend line support. This comes as the holiday lull is beginning to drain the markets of much-needed liquidity.

I mentioned the trend line that extends from the U.S. elections low during Monday’s session. At the time it was only the pairs second retest of the level.

Fast forward to today, and we can see that the price has bounced from the trend line on four separate occasions. But today’s breakdown isn’t all that surprising.

Here’s why…

Notice how buyers have struggled to launch the pair higher on subsequent touches following the December 19th retest. This pattern is something I’ve referred to in the past as heavy price action.

The recent close below support has cleared the way for a run toward the December 8th low at 120.90. A close below that would expose the December low at 118.70.

Note that the 121.70 area could also attract a few bids on the way down. The area previously served as support in April and May before becoming the December 19th low.

As mentioned at the beginning of this post, extra precautions may be necessary due to the lack of liquidity. The end of the year is known for being relatively quiet, which can sometimes trigger sporadic movements in price.

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EURJPY trend line break

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