Trade of the Day: EURJPY To Test 120
Trade of the Day: EUR dropped below 1.1000 handle for the first time in three weeks due to the drop of German business climate and Brexit issue. German Gross Domestic Product rose 0.3 percent in the fourth quarter, as higher public spending and investment compensated the weakness in exports. EURJPY touched 123.07, the lowest since April 2013. Risk aversion following the Chinese moves to fix the yuan at its lowest in six weeks as well as comments by BoJ governor Kuroda said what monetary policy can do was limited. He also said accelerating the pace of money printing alone would not boost expectations of future price rises.
Technical: While 123.70 offers intraday resistance expect a continued grind lower to print fresh lows and test bids at the psychological 120 en route to a weekly downside objective at 118/117
Trade Idea: The monthly chart suggests that we will test the psychological 120 level. This level is near the 50% retracement of the move off the 2012 lows, and the equidistant swing of the last leg down into the 2012 lows. From a trading perspective I am monitoring the current price action we may form a near term double bottom which could be the platform for a retest of 125 from below, this level also represents an equidistant swing with the last corrective wave. If this pattern plays out i will be watching for intraday reversal patterns at this level to set shorts targeting 120.
Trading Update: Short 124.70 stops to entry
Trading Update: Short 124.70 stops to 123.70
Monthly chart showing confluence of the 120 downside target
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