EUR/JPY Daily outlook – 06 March
Monday saw an initial fall for the Euro against the Yen, with the pair once again testing the important technical and psychological level at 107.00. Early losses were later clawed back as the bulls pushed the pair higher, closing the day slightly lower than it opened.
Yesterday’s price action produced a bullish pin bar on the daily charts suggesting further gains in the coming days. The pin showed an almost perfect bounce of the support level at 107 confirming its importance and relevance in the market.
We can see in the chart below the strength 107.00 has shown in the past. You’ll notice how the market has on numerous occasions bounced of this area. Its proven to be a stronger support area as opposed to resistance which may strengthen yesterdays bounce.
Our long bias can further be confirmed buy a potential bullish Hikkake setting up. The chart below shows how on Tuesday last week the market produced an inside bar. The following bar signaled the start of a bullish Hikkake with its Lower Low and Lower High in relation to the previous bar. For the bullish Hikkake to confirm we’d need to see today’s price continuing to push higher and breaking the high of last Tuesdays inside bar. Should this happen, our bullish outlook for the near term would certainly be strengthened and confirmed.
With Mondays strong bullish pin we’ll be looking to long the market in anticipation of further gains. We’ll aim to buy on limit at a 50% retracement of the pin, placing our stops just below 107.00. Initial targets will be placed just above last Tuesdays inside bar. Should the market reach this level in today’s trading session we’ll look to adjust our targets towards last week’s highs.