The EUR/JPY pair had a positive session on Thursday, but as you can see gave back almost all of the gains in order to form a nice looking shooting star. Of course, the biggest problem with that is the fact that the candle before it is a hammer and it suggests to me that the market is essentially going to go sideways in this relatively tight range.
Of course, we do have nonfarm payroll today so it's very likely that risk appetite will be adjusted throughout the session. That's relevant to this pair simply because it does tend to track risk appetite in general. As risk appetite rises, so does this pair.
I still believe that the 130 level is the "floor" in this market. Because of that, I think it even if we fall from here I won't be selling. I will simply be looking for some type of supportive candle in order to start buying again. I still believe in the longer-term viability of the uptrend in this pair, especially considering that the Europeans are exiting a recession while the Japanese still have a central bank that is trying to keep monetary policy as easy as possible.
Be patient, get rewarded.
This is a perfect example of a pair that I know what I want to do with, but may have to simply wait for that particular opportunity. For example, simply buying as the market falls is a good way to lose money. After all, they could drop 200 pips during the session and still stay above the 130 level. That doesn't mean that should buy the market at any level below, simply because cause it's falling and we believe there support somewhere down there.
In fact, I believe that waiting for a nice daily signal is what we will have to do. I don't know that we will get it on Friday, but I certainly think its coming. Alternately, if we managed to break above the shooting star for the session on Thursday, I would probably go ahead and start buying then.
