The Euro continues to range trade against most of its counter currencies, including the Japanese yen in the medium term. However, I think the EURJPY pair has the potential for more downside in the short term, and it might reach the 135.00 support level again in the days to come. So, I think selling rallies should be preferred with a small risk.
There are several resistances on the way up for the pair at around the 139.20-40 levels. If the pair trades higher from the current levels, gets closer to the mentioned resistance level and forms a bearish divergence, then we can jump into a sell trade. Remember, the risk/reward for this trade is great, as it has a potential of more than 400 pips.
Initial target should be around the 137.00 level, and final target could be around the 135.40 level. Stop should be around 50-60 pips from the entry.
Reviewing yesterday’s events and trades
Yesterday, the US existing home sales data and manufacturing PMI was released during the NY session. The outcome exceeded the market expectations, as the manufacturing PMI jumped to 57.5. The US dollar was seen trading a touch higher, but overall seemed to be struggling yesterday. The US dollar buyers were not keen to take it higher against most of its counterparts, including the Euro and Australian dollar.
Fundamental Outlook for the day
Today, during the NY session, the US new home sales data and CB consumer confidence will be released. The market is again expecting an improved reading. If the outcome comes in line with the expectations, then the US dollar might finally gain some bids against the Euro and Australian dollar. Alternatively, if the outcome misses the forecast, then it will give the US dollar sellers one more reason to take it lower. Let’s wait and see how the market shapes up in the upcoming session.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPCAD, USDJPY, USDCAD, EURNZD, EURCAD and OIL.
Get it HERE: Vladimir’s Markets Forecast
Have a great green week friends. Happy trading!
