EUR/JPY Daily outlook – 30 Jan 2012
The EUR/JPY has so far shown traders a month of two halves. Initially, bears were in control of the market, continuing its bearish theme seen for the majority of 2011; however the last fortnight has opened the doors for the bulls with the pair recovering early January losses.
Last Friday’s price closed the day with a bullish pin bar rejecting lower technical and psychological support at 101.00 suggesting the recent bullish momentum could be set to continue into the coming week.
Next resistance comes in at the 102.50 area which would be an initial target for any long trades taken.
Should we see the bulls disregarding the area at 102.50 further gains to 105.00 (next resistance) could be possible.
However the 102.50 area of resistance is strengthened by a 61.8% Fib retracement from the markets most recent down swing. With the markets previous ‘bounces’ of this area and the Fib retracement, 102.50 seems a logical initial target area.
Depending on any weekend gaps the market may produce we’ll be looking to long the pair to initially 102.50 with 105.00 in sight depending on the strength of the bulls at 102.50.
We’ll look to buy at a potential 50% retracement of Fridays pin, placing our stops just below Fridays lows giving us an initial R:R of approximately 1:3.
