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Buying dips in EURJPY offers ample risk/reward for a counter trend move

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USD INDEX- Close to a critical point. There is scope for further selling towards 89.20-88.80 zone to possibly form a Right Shoulder of a bullish reverse Head and Shoulders pattern. The intraday bias is to sell into rallies

 

Looking away from USD majors to EURJPY today as buying dips offers ample risk/reward in a counter trend move.

 

Monthly: In a huge triangle formation. Stalled at a previous congestion zone with levels above the Ichimoku Cloud finding sellers. With the presence of a bearish Outside Month, the long-term outlook is negative. Last month’s Marabuzo (mid-point from open and close) is located at 132.76

IG EURJPY M.png

 

Daily: Posted a Demark correction 9 count with level under our bespoke support zone (129.58-129.41) finding buyers. Bullish Outside Day posted at the low. This often indicates the change of a trend. The rally has stalled close to a previous congestion zone. What was support, now becomes resistance. There is ample scope for a further correction lower to buy into.

IG EURJPY D.png

 

Intraday ( one-hour) – Expect the move lower to be mixed and volatile. The78.6% pullback level of 129.82 is close to bespoke support at 129.60. We look to buy in this zone. Although we expect limited upside (after the strong initial selloff) buying dips offers ample risk/reward with a target close to 132.45 (we suggest a 70 pip stop)

IG EURJPY 60.png

 

In regards to the PIA analysis, no representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result

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