The EUR/JPY pair rose during the session on Thursday, but as you can see it struggled to hang onto the gains for any real length of time. The resulting candle is somewhat of a shooting star, and it does suggest that the market might be ready to pull back. However, I can make a serious case for support at 133, so therefore I don't think that the pullback will be anything of significance. In fact, I believe that wind up being a nice buying opportunity as the Euro continues to appreciate in general, and of course the Bank of Japan continues to work against the value of the Yen.
The market certainly prefers this pair to go higher, as it is a risk asset. This market tends to follow risk appetite in general, because of that you can a lot of times play this market based solely upon what the stock markets around the world are going as it follows them in general.
There is a floor in this market
I believe the 130 is about as low as this market can go right now, and quite frankly that is going to be very difficult for the sellers to obtain. I believe that any time that we fall in this marketplace, it is simply an invitation to buy the Euro at a lower price and for a better value. Because of this, I think the buyers will continue to step in at the first signs of weakness, and show support.
On the supportive candles, I fully intend to take advantage of that move, and start buying. Alternately, we could break the top of the shooting star from both Thursday and Tuesday, which of course would be a strong sign as well as it shows that the buyers managed to break through significant resistance. Ultimately, I believe that this market does go to the 135 handle, and probably as high as 140 in the next several months. I believe that this market has already shown that there is an upward bias in it, so really at this point time there's no reason to fight it.
