EUR/JPY Weekly outlook – 12 March – 16 March
Despite an initial fall for the pair early in the last trading week, the Yen’s weakness was once again confirmed with the latter part of the week seeing the bull’s taking control of the market pushing the pair higher. The weekly chart’s candle closed as a bullish pin suggesting traders may see a continuation of recent bullish momentum.
The chart below shows last week’s strong bullish pin. The pin bounced almost perfectly off a similar pin seen back in the summer of 2010 which resulted in a strong move higher. The next level of resistance comes in at the 111.50 area which could be a wise profit taking area for any long trades.
Friday’s price action produced a strong 4hr set up which is inline with the overall bullish bias for the pair. 3 inside bars were produced during the US session on Friday. Importantly, the inside bars were ‘coiled’ (meaning they are inside the range of each other sequentially) which confirms and strengthens a bullish move. The last 2 candles also were bullish pin bars which once again confirm a move higher could be expected.
The 4hr price action from Friday afternoon, showed a clear rejection of support sitting at the 107.80 area.
With the strong bullish price action being seen on both the weekly and 4hr charts we’ll be looking to buy the pair in anticipation of a continuation of recent bullish momentum.
Taking a trade from the weekly charts, we’ll look to buy on limit at 107 which is a 61.8% fib retracement from the weekly pin. Our stops will be placed at last week’s lows with an initial target being the next level of significant resistance which comes in at 111.50
