FBS: trading on EUR/JPY
Authored by FBS analysts
EUR/JPY hit a 6-month low of 137.15 on Thursday, pulled down by the increased risk aversion. ECB summer easing and absence of the BOJ easing support the long-term bearish view on the pair. Our bearish target lies at the 131.00 mark.
The cross is now testing the 55-week MA to the downside. What’s more, EUR/JPY broke into the bullish weekly Cloud during the past few weeks. As can be seen from the daily chart, the 55-day MA crossed the 200-ady MA to the downside, confirming the bearish power. Given all that, we see a high chance to break below 136.20 support (2014 low) in the coming weeks. Market is oversold, but the bullish corrections will likely be limited at 140.00.
Trade idea: Sell on a break below 136.20 with a target of 131.00 and a stop at 140.00
Chart. Daily EUR/JPY