The Euro recently corrected higher against some major currencies, including the Japanese yen. The EURJPY pair is trading a touch higher and heading towards a critical resistance zone. I think the pair might find sellers around the 139.00 area. So, selling rallies in the short term might not be a bad idea at all.
There is a bearish trend line forming on the 4 hour chart for the EURJPY pair. There are several resistances around the 139.00-40 levels. The pair is also forming a bearish hidden divergence on the 4 hour chart. So, if the pair gains from the current levels, trades closer to the mentioned resistance levels and forms a divergence on the lower timeframe, then we can jump into a sell trade.
Initial target should be around the 20 moving average on the 4 hour chart, and final target could be around the 136.00 level. Stop should be above the 140.00 level.
Reviewing yesterday’s events and trades
Yesterday, the US dollar was seen trading lower against most of the other major currencies, including the Euro, the British pound, the Swiss franc and the Australasian dollar. The Euro zone CPI data was released during the yesterday’s London session, which came mostly in line with the expectation. Later, the US pending home sales data and Chicago PMI were released, which came better than expected, but failed to hold the downside in the US dollar. Earlier during the Asian session, the RBA announced the interest rates, and the central bank decided to keep it at 2.5%.
Fundamental Outlook for the day
Today, during the NY session, there is an important release scheduled in the US. The US ISM manufacturing PMI will be released by the Institute for Supply Management. The market is expecting the US ISM manufacturing PMI to rise to 55.8 from 55.4. If the outcome comes out as expected or exceeds the expectation, then the US dollar might gain some ground in the short term. Alternatively, it might fall further in the coming sessions.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: USDJPY, GBPUSD, EURGBP, NZDUSD, AUDUSD, GBPNZD and EURNZD.
Get it HERE: Vladimir’s Markets Forecast
Trade safe friends. Happy trading!
