EURJPY stays below the 100 day MA and moves down. Watch the 200 bar MA on 5 minute chart today.
If you listen to our daily commentary (to sign up to receive the commentary send me an email at greg@fxdd.com), we talked about the EURJPY daily chart. We noted how the price has traded above and below the 100 day MA (blue line in the chart above) for 12 of the last 14 days. This is indicative of a non-trend market that is trying to decide if it wants to go higher or lower. We commented that if the price was able to stay below that key moving average overnight, this should lead to further downward pressure away from the key moving average. It was time for a break.
Today, the 100 day moving average came in at the 133.81 level. The EURJPY moved up to a high of 133.57 but that was all the upside the market could muster and the price started it’s slide to the downside.
There has been a couple corrective moves in the pair – this currency pair tends to have more volatility then the EURUSD – but the 200 bar MA on the 5 minute chart has been respected (green line in the 5 minute chart below). The market is acceptive of temporary moves above the 100 bar MA but not above the 200 bar MA it seems.
Going forward, the bias remains down for the pair. Since the price is trading near the lows for the day, waiting for a rebound is recommended. Selling against a stop above the 200 bar MA is the preferred trade. Judge your risk tolerance to determine your approprate trade location, but be patient.
The target? The move away from the 100 day moving average should solicit a move toward a test of the 200 day MA that level comes in at the 131.87 level. That would be the longer term target as long as the shorter term downward bias can remain in tact.
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