EURJPY Smashes Through 121.20, but Can It Be Sustained?

by Justin Bennett  · 

March 9, 2017

by Justin Bennett  · 

March 9, 2017

by Justin Bennett  · 

March 9, 2017

We seem to be getting mixed signals from the yen pairs lately. There are some including the AUDJPY that look relatively bearish at the moment. Then there are pairs such as the EURJPY and USDJPY that look somewhat constructive.

I’ve commented on all of these in the past week. But right now I want to turn your attention back to the EURJPY, a pair we discussed exactly one week ago.

At the time the yen cross was trading near the 120.30 handle and had recently closed back above 119.50. The March 1st break left me bullish in the short-term with one eye on the confluence of resistance at 121.20.

As mentioned last Thursday, this is the intersection of a key horizontal pivot and a channel extension from a level that was instrumental in the February 27th rally. It’s also the 50% retracement from the December 2016 high to the current 2017 low.

After a few days of chipping away at the 121.20 area, it seems buyers have cleared the path forward. But two things are preventing me from jumping aboard the bullish train just yet.

Until 5 pm EST rolls around, today’s break is inconsequential

I don’t often trade breaks on the intraday time frames, particularly when markets get volatile. Waiting for a daily close helps me establish a level of conviction I wouldn’t otherwise have.

The upcoming non-farm payroll report could rock the boat

I should probably say “will” rather than “could” as non-farm payroll (NFP) is good at stirring things up even if there isn’t a surprise in the number. With the event less than 24 hours away, I won’t be entering any new positions this week, regardless of how good a setup might look.

So, for now, I’ll stand aside to see where the pair closes at 5 pm EST and also wait for the dust to settle following tomorrow’s NFP report. If the combination produces a setup, I’ll look for an entry on Monday as I don’t want to hold a new position over the weekend.

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EURJPY daily chart

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