By FXEmpire.com
The EUR/JPY pair managed to fall yet again on the Thursday session, to print another hammer. This looks relatively supportive, and as such we are willing to sell at this low level. We think a bounce is fairly likely and will use it to her damage from which to sell from.
Above here, we see the 99 handle is the beginning of significant resistance that could come into the market and push prices lower upon that bounce. If you manage to get this type of move, it would make sense to see the sellers step back in as the trend is most decidedly down, the situation in Europe hasn’t changed, and there is a ton of noise right around the 100 handle.
This pair looks very weak, but it should be suggested that the 95 handle will be rather supportive. You can see a hammer that has a long wick the late part of the month of May, and this is what we are using is a gauge for our support. We think that represents massive support as the market bounced several handles from there.
Looking for longer-term charts, there’s no reason to think that this pair cannot continue lower. In fact, that is what we’re counting on, but understand there will be wicked bounces from time to time. It is because of this that we are very cautious with the recent price action looking supportive.
Even though we see the support, we don’t look to buy this market as it will undoubtedly be a short-lived rally. We prefer to go with the trend as it saves us a lot of stress, and also has many people pushing our trades in our favor as well. Because of this, we feel that more than likely we will be flat in this market for the short term, and simply wait for higher prices from which to sell from. Alternately, if we see a break down below the 95 handle – we would have to join the bandwagon and start selling.
Click here to read EUR/JPY Technical Analysis.
Originally posted here
