The EUR/JPY pair has been gradually going lower over the last several months. Looking at the longer-term charts, the pair has most certainly been bearish overall. Having said that, we did break back above the 130 level during the session on Tuesday which of course is bullish. So when I look at this chart, I look at the shorter-term downtrend line from the beginning of March to perhaps offer quite a bit of resistance. With that, I think some type of resistance and selling in this general vicinity would be a nice selling opportunity.
On the other hand, I do recognize that we could go above there and test horizontal resistance. I find that at the 132 level, so in essence this is a “sell only” pair until we break above the 132 handle. I recognize that the bullish candle on Tuesday does suggest perhaps the buyers are trying to take over, but the Euro continues to look vulnerable to potential resistance in several pairs right now, so I believe that this will be an indictment on the Euro itself.
Wait until the end of the day
I am going to wait until the end of the day in order to place a trade. I recognize that this pair is in a downtrend, but I also recognize that we haven’t exactly seen much in the way of selling recently. The Euro has been gaining, but at the end of the day I think there are far too many issues in the European Union right now to feel comfortable enough to hold that currency for any real length of time. Ultimately, if we can get above the 132 level I would be convinced now.
If we can get above the 132 level, I don’t see any reason why we won’t then go to the 135 level, but it will be a bit of a struggle as there is a lot of noise above. Ultimately, I am much more comfortable selling, but I am going to wait until we close at the end of the day in order to make a significant trade.
