EURJPY 2H
Fundamentals:
•Eurozone 10Y Bonds broke a key ascending trendline to the downside and have now retested it before continuing lower. This suggests that the EUR is overvalued and that investors are losing confidence in the Eurozone.
•Conversely, Japanese 10Y Bonds have been in a strong uptrend for a while now.
•The Non-Weighted Currency Index also shows that the Yen is strong, as it recently broke a descending trendline, retested it, and then surged higher.
•Meanwhile, the Non-Weighted Currency Index of the Euro shows the opposite pattern. A bearish flag is forming on the daily timeframe, which could indicate a potential decline.
•Lastly, we have the monetary policy divergence between the ECB and the BoJ. The BoJ is
expected to hold rates, while the ECB is expected to cut.
•The only concern is risk sentiment, which could weigh negatively on the Yen.
Technical Analysis
•On the daily timeframe, there is a strong uptrend, but a bearish triangle has formed.
•On the 8H timeframe, we can see a 61% Fibonacci rejection, forming a clear double top, signaling strong selling pressure, followed by a break of a key support level.
•On the H4 timeframe, another double top confirms the sellers’ strength, further validated by the break of the 50-SMA, which had previously acted as a dynamic support.
•I am expecting a rejection at 50% Fibonacci at 156.180, which will be my entry price.
•Stop-loss at 159.400, slightly above the previous support-turned-resistance.
•Target: 149.000, a psychological level and a round number.
•Retail traders are mostly long (80%), confirming that a short position would be a valid opportunity.
Fundamentals:
•Eurozone 10Y Bonds broke a key ascending trendline to the downside and have now retested it before continuing lower. This suggests that the EUR is overvalued and that investors are losing confidence in the Eurozone.
•Conversely, Japanese 10Y Bonds have been in a strong uptrend for a while now.
•The Non-Weighted Currency Index also shows that the Yen is strong, as it recently broke a descending trendline, retested it, and then surged higher.
•Meanwhile, the Non-Weighted Currency Index of the Euro shows the opposite pattern. A bearish flag is forming on the daily timeframe, which could indicate a potential decline.
•Lastly, we have the monetary policy divergence between the ECB and the BoJ. The BoJ is
expected to hold rates, while the ECB is expected to cut.
•The only concern is risk sentiment, which could weigh negatively on the Yen.
Technical Analysis
•On the daily timeframe, there is a strong uptrend, but a bearish triangle has formed.
•On the 8H timeframe, we can see a 61% Fibonacci rejection, forming a clear double top, signaling strong selling pressure, followed by a break of a key support level.
•On the H4 timeframe, another double top confirms the sellers’ strength, further validated by the break of the 50-SMA, which had previously acted as a dynamic support.
•I am expecting a rejection at 50% Fibonacci at 156.180, which will be my entry price.
•Stop-loss at 159.400, slightly above the previous support-turned-resistance.
•Target: 149.000, a psychological level and a round number.
•Retail traders are mostly long (80%), confirming that a short position would be a valid opportunity.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.