EUR/JPY Technical Analysis: Resisting at Old Support
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EUR/JPY Technical Analysis: Resisting at Old Support

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Talking Points:

In our last article , we looked at the continued range-bound price action in EUR/JPY with eyes on the vaulted psychological level at ¥120.00. But as we had written, until the longer-term zone of support between 118.50-119.00 was traded through, traders would likely want to avoid getting too bearish on the pair, with the potential for top-side range entries using that 120-level zone as support.

And after a quick breach of ¥120.00 last week, with one daily close below this zone, price action has run-higher, giving the appearance that the bullish side of the range may be trying to come back into the market.

But more recently, we've seen sellers showing quite a bit of response at the 121-handle; which was a prior support level. And this, coupled with the fact that we've had a recent lower-low, gives the appearance that this range may be nearing a down-side break. This should give pause to bullish approaches until more confirmation is had, perhaps using the confluent zone of potential resistance around 121.65 as an initiator for bullish-continuation.

On the bearish side of the pair, there could be an aggressive short-term setup to be worked with utilizing that zone of potential resistance. Stops above this level could account for ~70 pips of risk, and an initial target cast towards that zone of support around 120.20 could allow for ~80 pips of potential upside to the initial target.

Chart prepared by James Stanley

--- Written by James Stanley , Analyst for DailyFX.com

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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