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EUR/JPY: 7x Is Not A Charm

BySecond Skies
AuthorChris Capre
Published 03/22/2012, 02:58 AM
Updated 05/14/2017, 06:45 AM

After taking out the yearly highs and climbing for 6 days in a row, it turns out 7x is not a charm as the pair ran into sellers just 12pips shy of the Nov. 2011 swing highs at 111.54.  For the first time in almost a year, price action has formed its first bearish engulfing bar (outside bar) while being above the daily 20ema.  It also turns out this engulfing bar is also a pseudo pin bar as well adding strength to the upside rejection and trap.

Price sold off into the 109.90 prior yearly and swing highs.  Bears will have to break through this to add selling pressure on the pair.  We will look for a pullback and price action triggers into the 111.42 highs to possibly short this pair, looking for a return back to 109.90 and possibly a break down to the 108.15 level which is where the daily 20ema is parked for now.  Unless the bulls come back with a vigor, sellers will likely maintain short-term control of the price action as profit taking from stale longs will likely take place throughout the day with such a bearish close.
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The Forex Market Today:
The Euro dollar ran into a two week high and also prior resistance level while the EURJPY ran into a 5-month peak against the JPY.  Combined selling on the two with worries about Spanish 10Y yields renewing Euro-Zone worries, and a cooling housing market in China all hurt the EURO today.

The other big loser on the day was the Australian dollar which fell 0.3% against the USD today.

Global Markets Today:
Stocks sold off today in medium selling after the US Housing data disappointed with US Home Sales dipping 0.9%.  The DOW ended the day down about 45pts down .34% while oil extended moderate gains to $107 a barrel. 

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