EURJPY, 240 min
Euro area January industrial production beat the estimates today with actual figure being 2.1% while the consensus expectation was 1.5% and December number negative at -1.0%. According to the Eurostat the increase is due to production of capital goods rising by 3.9%, energy and non-durable consumer goods both by 2.4%, durable consumer goods by 1.3% and intermediate goods by 0.9%.
Long trade idea: EURJPY has been trending lower since July last year and has now after overshooting the bearish daily channel shown signs of stabilization. After creating two weekly bullish pin bars the pair rallied higher towards 127.50 resistance where it hit both 30 and 50 day SMA and the upper Bollinger Bands (20). The pair has been overbought as per Stochastics (7, 3, 3) in 4h chart and is in the process of rolling over. I look for a move to my Buy Area at 124.60 – 125.00 which roughly coincides with the moving averages (30 and 50 periods) and the lower Bollinger Bands (1.5 sd, 20 periods). We look for buy signals at or inside the area with Target 1 is at 126.60 – 127.60 and Target 2 at 128.00 – 128.60.
Short trade idea: Those that have an interest to play the short side while waiting for the price to move to the Buy Area, might consider shorts with a target at 125.45 (dotted line). In this case we’d look for sell signals between 126.50 and 126.80.
Only trade these trade ideas if your own analysis agrees with them and you are confident that in your risk management.
Janne Muta
Chief Market Analyst
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About Janne Muta, HotForex’s Chief Market Analyst
Janne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.
Traders and fund managers from around the world have benefited greatly from Janne’s technical analysis methods. The indicators and price action based trading models he has developed, have, after rigorous testing, proven to be invaluable in identifying high probability trades.
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