EURJPY, 240 min
The yen has weakened on a report that the BoJ is considering making a bigger commitment to NIRP, which may be a cut in the -0.1% rate on selected excess bank reserves and the introduction of negative-rate loans, according to Bloomberg sources. Japan’s Markit manufacturing PMI survey for April underscored the plight of Japanese policymakers. The headline dove to 48.0 from 49.1 in the previous month and is the lowest since January 2013. The sector has been blighted by a double whammy of yen gains during the early part of April, which sent the currency to 18-month highs versus the dollar and three-year highs against the euro, and the activity-disrupting earthquakes that struck the island of Kyushu.
EURJPY is at the time of writing trading near a resistance at 124.87. This resistance level is outside the upper Bollinger bands in the 4h chart and lower time frame charts suggest loss of upside momentum near the level. I’m not as a rule a buyer near resistances but rather wait for pullbacks to my buy areas before risking money. This means that sometimes I prepare to take a trade at certain levels but the market doesn’t move to those levels. That however, is fine. In the long run it is better to be selective with risk taking than overtrade when we don’t have an edge. In the bigger picture EURJPY is trading near weekly lows and I’m therefore interested in long trades but only after significant pullbacks. Due to recent volatility in EUR I’d rather be careful with my entries and therefore seek for buy signals between the 38.2 and 61.8% Fibonacci levels that coincide with the lower Bollinger bands and both 30 and 50 period moving averages.
I’m looking for buy signals in EURJPY at or inside my buy area between 122.95 and 123.70 with Target 1 at: 124.80 – 125.40 and Target 2 at: 126.75 – 127.35. Using strict risk management is recommendable as usual. If you don’t know how to manage your trading risks professionally you are welcome join to my free webinars to learn more.
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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