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- EUR/JPY Strategy: Holding short from 122.65
- Euro selloff accelerates as prices hit three-month low vs. Japanese Yen
- Sellers now appear poised for a test of support below the 117.00 figure
The Euro looks vulnerable to deeper losses after declining to the lowest level in three months against the Japanese Yen after prices broke chart support. The pair has fallen for four consecutive days, making for the longest losing streak in six weeks.
From here, a daily close below the 23.6% Fibonacci expansion at 116.66 opens the door for a test of the 38.2% level at 112.06. Alternatively, a reversal back above the 14.6% Fib at 119.49 – now recast as resistance – sees the next upside barriers at 120.05 (falling trend line) and 121.14 (support-turned-resistance shelf).
A short trade was triggered at 122.65 and profit was booked on half of initial exposure when prices hit the setup’s first objective. The rest of the position continue to be in play, looking to capture any follow-on weakness. The stop-loss has been trailed to the breakeven level.
Why is EURJPY a top trading idea for 2017? See the fundamental strategy here.