The EUR/JPY pair fell during the session on Friday, but as you can see found enough support at the 141 level to bounce again. Even though the candle is a negative one for the session, it does look somewhat neutral, so therefore I feel that we are going to continue to see buying pressure every time we dip in this general vicinity. After all, this pair had been one of the better performers until the last couple of months, so I think that perhaps the longer-term money is sitting out of the market at the moment, simply taking a rest.
You have to keep in mind that this pair is highly risk sensitive, and as a result it will react to stock markets and commodity markets around the world. When things are good, this pair rises, but when things are bad, this pair falls. That will continue to be the case as at correlation has held up quite well over the years.
Several hammers.
I see several hammers on this chart right around this area, so that’s why I believe that the buyers are trying to lift this market. It doesn’t really matter though, because there has to be quite a bit of support below in order for that to happen so I figure that this market is probably going to find significant support all the way down to the 140 level. So anywhere in between here and there are willing to buy a supportive candle as it appears. That being the case, I am obviously “buy only” at the moment in this marketplace.
In fact, it’s not until we clear the 139 level that I would be comfortable selling as I believe that the 140 level has a significant amount of support in it. Going forward, I would expect this market to aim for the 143.50 level, and then ultimately the 145 handle. I still think that by the end of the year we could be looking at 150 print, but it’s not necessarily going to be the easiest move to make and therefore I would expect quite a few bumps along the way.
