EUR/JPY Forecast June 16, 2016, Technical Analysis

The EUR/JPY pair initially tried to rally during the day on Wednesday, but turn right back around to form a bit of a shooting star. When you form a shooting star at the bottom of the downtrend, and it normally means it’s are going to see continuation so therefore we are sellers. A currently looks as if the 120 level will offer a significant amount of resistance, so at this point in time it’s “sell only” until we break well above that level. At this point in time, we have a target of 115 but realize it is going to take some time to get down there.
This makes a lot of sense, because the EUR/JPY pair tends to be very sensitive to risk around the world, and right now there is more than enough of it to make the markets a bit skittish. The Japanese yen is a very “safety minded” type of currency play for the Forex markets around the world, so it makes sense that we would be running from the Euro, which of course has to worry about whether or not the United Kingdom is going to be part of the European Union soon, and running towards the relatively safe Japanese currency.
The 115 level is the target longer-term, mainly because it is a large, round, psychologically significant level. I believe eventually we will get down there but it is going to be very choppy below. After all, we have sold off rather drastically over the last couple of weeks so we have to wonder whether or not there is still selling pressure to be had without some type of momentum building first. Rallies will be used as that, and therefore I look at rallies as opportunities to sell on signs of exhaustion with the short-term charts. In fact, I don’t really have a scenario at this moment where I’m looking to buy this particular currency pair as it has been so bearish for the longer term, and I believe that a lot of volatility will continue to plague the Euro.
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