EURJPY's Upward Momentum and Opportunities AheadThe EURJPY pair has shown promising strength after a corrective phase from its peak on March 21, 2024. Today, it successfully breached a significant resistance level at 163.322, providing a stronger confirmation of the existing bullish momentum. With this noteworthy breakout, the allure of a Long position becomes increasingly compelling.
Technical Analysis:
On the 4-hour timeframe, EURJPY is currently trading above several key moving averages, including the SMA 7, SMA 24, and SMA 150. This indicates clear bullish strength, especially after a prolonged correction period. The breakout from the resistance level at 163.322 adds confidence to further bullish momentum, with technical indicators suggesting potential for higher moves.
Fundamental Insights (JPY):
Despite the Bank of Japan's exit from negative interest rate policy, BOJ Governor Ueda has reiterated the commitment to continue purchasing Japan Bonds and refrain from raising interest rates. This monetary policy stance has triggered sustained weakness in the Japanese yen, evident from its recent depreciation. With supportive fundamental conditions, yen weakness adds impetus for the EURJPY pair to continue its bullish trend.
Trade Targets:
- Target 1: 164.414
- Target 2: 165.380
- Target 3: 167.252
These targets are calculated using Fibonacci ratios, with Target 3 reaching approximately 140% of the previous rally and the historical resistance. Each target offers potential for significant gains for traders entering Long positions.
Risks to Consider:
- Sudden shifts in market sentiment or unforeseen fundamental developments may impact the direction of EURJPY movements.
- Market volatility and the possibility of retracement during the journey towards the take profit targets should be duly noted.
With a strong confirmation of bullish breakout and support from both technical and fundamental analyses, Long positions in EURJPY present enticing profit opportunities. However, it is essential to remain vigilant of risks and manage them prudently with every trade executed.
