It’s been some time since I last discussed the EURJPY. We have to go back to March 6 to find the last time anything favorable was happening with the Euro cross. It was about that time that the price action turned sour.
You might remember the rising wedge that broke down on February 8. The following session retested old support as new resistance at 134.16 which triggered a 480 pip slide.
I had mentioned that wedge a few weeks before the February 8 breakdown. I even shorted the EURJPY near 137.00 and rode the momentum down to just above 131.35 in mid-March.
However, since that time, I’ve had no interest in the pair. I prefer trading “clean” price action that doesn’t leave much to the imagination; the past five weeks have exhibited anything but that.
As we all know, though, consolidation must end at some point. Just like any trend, it won’t go on forever. The goal then is to figure out where the EURJPY might be headed in the near-term so we can capitalize on the next move.
Given the breakdown in February and the recent lower low, I have to favor the short side. February’s monthly candle also produced a sizeable bearish pattern that hasn’t yet played out in my opinion.
With that in mind, the next key resistance level on my radar is 133.00. You’ll notice that the 133.00 handle has served as a pivot since late September of last year.
As such, any bearish price action from the 133.00 area could offer a chance to get short. A daily close above it (New York 5 pm EST) would expose the next key resistance level at 134.35.
Alternatively, a daily close back below 131.75 today could offer a chance to get short in the form of a bearish pin bar. I’m keeping my eye on that possibility as well.
Support levels to the downside are more difficult to discern due to the recent choppy price action. That said, there appears to be a pivot at 131.75 as well as 130.00.