Daily Price Action
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EURJPY Reaches First Target at 129.30; Bearish Below 131.00

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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.

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One of the five currency pairs in Sunday’s forecast was EURJPY. As of Friday’s close, the pair was sitting just above a confluence of support at 130.90.

However, I wasn’t interested in buying EURJPY. In truth, I had already sold the pair at 131.40 and again at 130.00 before I released Sunday’s post.

I shared these entries and my reasoning behind them inside the member’s community. The gist of that reasoning had to do with a weakening euro coupled with an S&P 500 index that looked ready to tumble.

You see, the Japanese yen is still considered a safe haven currency. That’s been the case for many, many years. So, when risk assets such as equities selloff aggressively, market participants tend to flock to the yen, driving the price higher.

That’s one reason why I sold EURJPY last week. The rest had to do with the euro as well as the way EURJPY was struggling to move higher from 131.00. Not to mention a healthy dose of intuition.

If you saw Sunday’s commentary, you know that 129.30 was the next support below 130.90. I even wrote that on Sunday’s EURJPY chart.

It’s no coincidence then that yesterday reached a session low of 129.33 before bouncing higher by more than 100 pips. That’s a big clue for those of us who trade price action using end-of-day charts (make sure your charts use a New York close).

How does the bounce from 129.30 help us? It helps because it illustrates the demand in the 129.30 region. Not because I want to flip from short to long, but because I may add to my short position following a daily close below 129.30.

That’s Technical Analysis 101. If EURJPY can close below 129.30 support, the area should begin to serve as new resistance. At the same time, as long as the market holds above 129.30, we could see bouts of strength like today.

Just keep in mind that 129.30 is by no means a perfect level. The pair has chopped around this area in the past, so take any breakdown here with a grain of salt.

Last but not least, don’t rush your entry. A volatile pair like EURJPY has a way of punishing those who lack patience. If the market fails to retest the 131.00 area as new resistance, it may be best to wait for a daily close below 129.30 or thereabouts.

As always, when in doubt, stay out.

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EURJPY support and resistance

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13 comments
khulekane says

Thanks Justin I dont regret switching to daily tf trading pure price action.Things are starting to change slowly.

Reply
    Justin Bennett says

    You’re welcome. I can’t imagine using anything else. 🙂

    Reply
coaches says

Hello,i just started doing forex a month ago,i like your sentiments and would like to follow you,any advice on newbies like me?

Reply
    Justin Bennett says

    Sure, review the 100+ free lessons on this site. There’s a ton of useful information here.

    Reply
      Wouter says

      Thanks for your info on price action. If I join do you give daily set ups aswell. Apart from the weekly forecast. Been with so many traders but after joining the info isn’t that accurate aftetwards. Thanks

      Reply
        Justin Bennett says

        Yes, there are daily trade ideas. There are also dozens of forums, one for each pair/market, where we discuss ideas and methods throughout the day.

        Reply
Mfundo says

Thank you coach for your efforts of striving to create better traders. I would like to know about the term safe heaven?

Reply
    Justin Bennett says

    You’re welcome. Here’s a working paper from the IMF that will explain more than you probably want to know about the yen as a safe haven currency:

    http://bit.ly/2PmymvA

    Reply
Md.sujayeat hossain says

Dair. i am samting exprencs you my halpu.

Reply
Lily says

Hi Justin,
I want to join your course (send me the details please) and enjoy the advantage of fees reimbursement by using your recommended Blueberry.
Can you send me the link…?

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Lily says

Opss. Sorry. Got it now…

Reply
Lily says

Hello Justin,
I have just signed up your trading course and had too registered a Blueberry Live Account pending for approval.
What shall I do next?

Reply
    Justin Bennett says

    You will receive emails with instructions. Please email me for anything further so we can keep these comments open for EURJPY discussions. Thanks.

    Reply
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