Today I’m going to share a potential EURJPY short setup that could materialize below 158.00.
I’ll discuss what the pair needs to do to confirm the setup, and key levels and targets to watch along the way.
Watch the video below and scroll down for the annotated charts and analysis.
I’ve had EURJPY on my radar for the last few weeks.
The pair tested a long-running channel resistance in June, but became difficult to trade during the BoJ events in late July.
Fast forward to this week, and EURJPY looks much more attractive.
However, I’m not interested in longing the pair, despite the uptrend since March.
If you watch the video above, you’ll see that EURJPY is trading near the top of a multi-year channel.
Furthermore, the pair is breaking back below a key horizontal level today at 158.00, confirming the recent move as a fakeout.
A fakeout to one side of a level or pattern often triggers an extended move in the opposite direction.
For EURJPY, that means a move lower.
Of course, there are no guarantees, and I would ideally like to see a retest of the 158.00 region as new resistance before considering an entry.
But if that region holds as resistance after today, we could get that pullback into 154.00 and potentially lower next month.
As always, the information in this post is my opinion only and is not financial advice.