Chart of the Day: EURJPY
Over the past two days, we’ve seen strong selling in EURJPY driven by weak European manufacturing PMI data. Let’s consider the pair printed higher highs for seven consecutive days last week, rallying into June double-bottom neckline at 123.18. As we can see, the move wasn’t sustained with a failed break, and we’re seeing a retracement.
A strong, sustained move like we’ve seen tends to attract sellers, and the failed break, coinciding with the price breaking below through a 21-period MA (four-hour chart), has seen the 50% Fibonacci retracement of the June rally in play. Momentum is clearly to the downside. But if we do see buyers start winning back some control, then we should watch for a retest of the double-bottom’s neckline, as a closing break here would argue for a move into 124.50.
With the market keen to see who’s going to be the next European Central Bank president, and this could be formally announced this week, EURJPY could be a pair to keep on the radar. Specifically, a move above 123.18 would get my attention.
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