Eur Jpy Analysis 19 Jun 11

1

The last couple of weeks I’ve only been analyzing the Eur/Usd currency pair, so I thought today I’d add in another pair, namely Eur/Jpy.

Eur/Jpy is an interesting currency pair, because just 3 years ago it was at a high of 170.40 and it traded as low as 106 this year. That’s a whole lot of pips to be traded if you ask me.

Let’s look at some charts to see what’s going on and how you can profit from trading this currency pair.

From the weekly char above I see the following:

• After the mass decline in 2008 there was a big bounce and sideways consolidation for almost a year between 130.00 and 138.00.
• Beginning 2010 saw a decline down to new lows of 106 and another sideways consolidation of 8 months.
• 2011 Saw a rally up to around 123.00 (just above the 100MAE on weekly) and now a decline back to 114.47.
• Eur/Jpy is currently under its 100MAE, 50MAE and 21MAE which is bearish.
• Slow stochasics are pointing down which is bearish.
• RSI is at 48.20 which is bearish.
• Eur/Jpy is under a strong descending trendline and at a horizontal level that has proven to be strong support and resistance over the last 2 years

I expect a break down to the 110.50 area, starting in the next week or 2 weeks.

• The daily chart above shows that 1-4 days upwards movement are possible.
• The 100MAE,50MAE and 21MAE are all around the 116.00 level.

• From the 4 hourly chart you can see how the upwards movement was halted by the 21MAE.
• Once again, the 4 hourly 100MAE is near to the 116.00 level so a rally for 1-4 days is a possibility before heading lower.

Conclusion for Eur/Jpy Analysis

I want to short this from 115.20 up to 116.20 with a stop above 116.50.

Target 110.50 area.