EURJPY Daily (The Big Turn?)
We have seen EURJPY top out ahead of the 134.35-40 area which is an old double top from 2017… we have since broken lower… the DMI break (sell signal) did happen way before the FED meeting and hence a hawkish FED meeting has had the chance to see a fast acceleration of the down move, given the charts were already skewed to the downside.
The 130.60 pivot area is my key level and the door opener to the downside. we had a brief intraday break BUT given all the 4h charts in the USD pairs and Cross pairs were a bit stretched, we might just need 24 to 48h of consolidation and small bounces to correct the short term charts, in order to continue with the big charts like the daily one.
I would think that EURJPY will NOT manage to break back above 132.05… not only the fibo resistance but also the back side of the broken multi-month support line. Selling the rally into this short term correction is the tactical right way to trade this I feel…. later in the week, once the short term charts have corrected, we should follow the strong trend signals from the daily charts again…. a 130.60 break could be the time when we start to properly roll over and head towards 128.70 next.
The reader of my research will also know, that I see EURUSD heading towards 1.1695 next while we stay below 1.1945… and should EURJPY indeed do what we expect it to do, EURJPY could even trigger bigger losses in the EUR towards 1.1500, so it is worth to pay attention to the price action in the next few days.
The shift from the FED has started to unwind the Reflation trade that has been going on for a long time… be it EURJPY or AUDJPY,CADJPY… the crosses have come a long way with the help of the FED… now that story has a change… and it would make sense to finally see a decent correction in all of the JPYxxx and the USD of course.
A proper correction for me would be to trade down towards the 126.00 fibo support… if we would get a full turn or not… that we talk about if and when.. for NOW, our focus should be on that 130.60 and the next few weeks… as that is when this next leg will happen.
WATCH 130.60 trigger and WATCH 132,00 area to get short or increase shorts
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