Written by Theunis Kruger, FX Trainer at FXTM
The EURJPY currency pair, on the D1 time-frame, was in an uptrend until January 16 when a higher top was recorded at 122.872. Supply overwhelmed demand and the upward momentum was negated.
A closer look revealed that the Momentum Oscillator displayed negative divergence between point A and B, compared to the price at 122.498 and 122.872. This could have alerted technical traders to a potential technical reversal in the making.
After the top at 122.872, the market broke through the 15 and 34 Simple Moving Average and the Momentum Oscillator broke through the zero baseline into negative territory. This further confirmed the possible price reversal or initial stages of a new trend.
A possible critical support level formed when a bottom was recorded on January 30 at 119.771. Buyers tried to pull the market higher but the price found resistance on February 5 at 121.152 and sellers pressed the price lower again. The new bearish momentum was confirmed with a Strong Bearish Japanese Candlestick that formed two days later.
On February 10 the EURJPY broke through the critical support level at 119.771 with a short position ensuing. Three possible price targets were projected from there. Attaching the Fibonacci tool to the bottom at 119.771 and dragging it to the top of the last pullback at 121.152, the following targets were calculated. The first target was estimated at 118.918 (161 %) and was reached on February 13. The second price target was forecast at 117.537 (261.8%) and the third and final target might be anticipated at 115.302 (423.6%).
At this point in time, as always in the market, anything can happen and we need to effectively manage our risk. As long as sellers maintain a negative sentiment and supply overcomes demand, the outlook for the EURJPY currency pair on the Daily time-frame will remain bearish. If the resistance level at 121.152 is broken, the above anticipated scenario is no longer valid.
For more information, please visit: FXTM
Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.
Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
- What Does Binance Being Kicked Out of Belgium Mean for Crypto Prices?
- Crypto Traders and Coin Prices Face New Challenge as Binance Gives up its FCA Licence
- Interpol Declares Investment Scams “Serious and Imminent Threat”
- Annual UK Fraud Audit Reveals Scam Hot-Spots
- Former Schwab, Wells Fargo, and Morgan Stanley Advisor is Sentenced to Seven Years
- FX Fraudster On The Run After £70m Ponzi Scheme Collapses
What Does Binance Being Kicked Out of Belgium Mean for Crypto Prices?
Safest Forex Brokers 2023
|Broker||Info||Best In||Customer Satisfaction Score|
|#1||72% of retail CFD accounts lose money. Founded: 2014||Global Forex & CFD Broker||
Best Trading Conditions Visit broker
|#2||Your capital is at risk Founded: 2014||Global Forex Broker||
BEST SPREADS Visit broker
|#3||Your capital is at risk Founded: 2006||Globally regulated broker||
BEST CUSTOMER SUPPORT Visit broker
|#4||82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Founded: 2008||Global CFD Provider||
Best Trading App Visit broker
|#5||Between 74-89 % of retail investor accounts lose money when trading CFDs Founded: 2010||Global Forex Broker|
|#6||76% of CFD traders lose money Founded: 2007||Global CFD & FX Broker||
ALL-INCLUSIVE TRADING PLATFORM Visit broker
|#7||Your capital is at risk Founded: 2009, 2015 and 2017||Global Forex Broker|
|#8||Your capital is at risk Founded: 2006||CFD and Cryptocurrency Broker||
CFD and Cryptocurrency Visit broker
Forex Fraud Certified Brokers
Stay up to date with the latest Forex scam alerts
Sign up to receive our up-to-date broker reviews, new fraud warnings and special offers direct to your inbox