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Forex Trading: EUR/JPY Trying to Stabilize After Drop

Currencies / Euro Jun 30, 2016 - 12:12 PM GMT

By: Richard_Cox

Currencies

Forex markets have been taken by surprise with the amount of volatility that has been seen in recent weeks.  There are strong fundamental reasons for why this has occurred, as it has been almost impossible to avoid media coverage of the recent ‘Brexit’ events.  But now that we have some finality in these areas, it is time to take a step back and assess what is actually happening to prices so that traders have an indication of what to expect going forward.


Chart View:  EUR/JPY (Euro vs. Japanese Yen)

Critical Resistance 1:   117.260
Critical Resistance 2:   115.451
Critical Support 1:  111.405
Critical Support 2:  109.501

Trading Stance: Traders will likely look for selling opportunities near critical resistance at 115.451.

Chart Source:  FiboGroup

The long term downtrend is still intact and gained huge downward momentum due to the recent major economic news of the Brexit. Currently, the price is trading nowhere near the key support and resistance level with an overbought stochastic oscillator. We will wait cautiously for the price to retrace back towards the 115.451 level.

A bearish price action confirmation signal near the key resistance level will trigger our short setup with an initial bearish target of the major support level 111.405.  A clear and decisive break of the first support level will bring further downward movement of the pair towards the 109.501 level. On the contrary, if the price manages to break the key resistance level 115.451, then the EURJPY pair will challenge the next major resistance level of 117.260.

However, before breaking the 117.260 level we can assume a plenty ranging movement in the market between 117.260 and 115.451 levels. A successful break of the 117.260 level on the daily chart will bring short term uptrend in the action which will eventually challenge the next key resistance level 121.782

By Richard Cox

© 2016 Richard Cox - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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