Resistance at 126.06
Yesterday, I posted a video that looked at the technicals from a trade recommendation from BNP (I reposted the video below - I think it is educational as well so worth a watch). There recommendation was to go long EURJPY on the back of chance for the BOJ to ease this week. I took it further by looking at the technicals and defining the risk.
So where does the trade stand?
The price action did correct lower toward support levels outlined in the video. Specifically, the price dipped below the weeks low at 124.78 (the low reached 124.68) but stayed comfortably above the closest risk defining levels defined by the 100 hour MA and the rising trend line (those are currently at 124.62 and 124.53). So dip buyers seemed to be anxious to buy against defined (and limited) support. Good trade for patient buyers. Risk was limited and that is always a good thing!
The price has subsequently rallied to a high of 125.92.
If you recall, the first upside target to get through on the topside is the 126.06 level. This level corresponded with the 2015 low price. As mentioned in the video, the market traders will remember that level. So there should be a cause for pause on the first test (with stops on a break above). The high price today has peaked at 125.92 (currently trades there as I type).
The trade is off to a good start but the first...well second test looms at the 126.06 level (the 1st test was on the correction lower). Dip buyers against support have been rewarded. Now comes the challenges at the first key resistance area.
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Below is the aforementioned video for your review. The horse has sort of left the barn, BUT I think traders will find it educational.
If you like it, be sure to hit the thumbs up on the YouTube page. If you don't like it hit thumbs down. You can also share it too!. It is through your votes and comments that we get feedback.
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