Today we have an interesting opportunity for EURJPY as I think the pair can continue to trade higher in the short term, and reach an important down-move trend line, as can be seen in the 4 hour chart. The pair has recently breached the range resistance to trade higher, and now the same resistance might turn as support moving ahead.
Looking at the hourly, there is a bearish divergence forming, which can cause a small pullback in the pair, and will present us a buy opportunity in the medium term. So, once the pair retraces the recent gains and trades closer to the 141.70/50 support level, then we can enter a buy trade in EURJPY. Remember, the pair needs to hold the mentioned support level in order for this trade to be valid.
Initial target should be around the 142.60 level, and final target could be around the down-move trend line. Stop should be placed below the 141.50 level.
Reviewing yesterday’s events and trades
The US dollar is trading a touch lower against all its counterparts except the Japanese yen. The dollar bulls seem to be nervous despite the positive US pending home sales report, which was released yesterday. The EURUSD pair traded as high as 1.3880, and then fell back towards the 1.3850 level. The GBPUSD is one of the best performers, as the GBPUSD pair climbed to a new high, and again rising back to test the same level as of writing. NZUDUSD and AUDUSD are the pairs, which are trading lower intraday, as the market awaits FOMC this week.
Fundamental Outlook for the day
Today the CB Consumer Confidence and the US S&P/Case-Shiller House Price Index will be released during the NY session. If the outcome comes out positive, then the US dollar can gain some ground intraday, else it might turn further lower. There are some major events lined up later during the week, which could have a critical impact on the risk sentiment in the coming days. So, we need to keep a close eye all the incoming data.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, EURGBP, NZDUSD, EURAUD, GOLD and OIL.
Get it HERE: Vladimir’s Markets Forecast
Have a great week friends. Happy trading!
