The EUR/JPY pair fell during the course of the session on Friday, but as you can see we have been consolidating recently, and the red line at the 138 level has in fact offered support for some time now. This being the case, I believe that this market will continue to bounce around in this general vicinity, and the fact that we fell during the session on Friday has a very little bearing and what ultimately happens in this market. After all, you can see that there is a significant hammer that formed at the 138 level just a week ago, and I believe that’s a sign that the buyers will continue to step in.
Because of this, I will be looking for some type of supportive candle closer to the 138 level to turn around and start buying again. I believe that this market will eventually break out much higher, but in the meantime I think it’s going to be more or less short term trading waiting to happen.
Massive base formed at the 138 handle.
There has been a bit of a massive base formed at the 138 handle, as we have struggle to break down below there, and as a result I believe that this market will not break that area for any significant amount of time. However, even if we did break down below that level, there should be a significant amount of support all the way down to the 135 handle. It’s not that I can see shorting this market below the 138 level, it’s just that you will have to be careful if you do in fact start selling.
I would prefer to buy this market, and I believe that ultimately the next target should be the 140 level, and I think as long as the markets are in the same type of attitude, we will be able to buy this market over and over, taking small gains and possibly even staying like that for most of the summer as there’s real no catalyst to change the attitude of the market overall.
