EUR/JPY Key Points

• Higher time frame, EUR/JPY bearish trend.
• Break of intraday trend line support in direction of higher time frame trend.
• Retest of short term support turned resistance gives possible short entry.

EUR/JPY Technical Analysis

Morning team,

Coffee, music and searching for opportunity in the markets. Is there a better way to start the morning!

Flicking through my MT4 charts today and it's the Yen pairs breaking through support that have all seemingly caught my attention. While I tweeted a USD/JPY chart simply because it's one of the majors, it's actually EUR/JPY where I see the best opportunity for a low risk, high reward short.

Take a look at the hourly EUR/JPY chart below:

You can make trading as simple or as complicated as you like and today's setup is certainly on the simple side.

Zoom out to a 4 hour and you can see where the trend line starts, but I've drawn it the most obvious way to me. After price broke through it to the downside, we go a pretty clean retest of previous support as resistance and price went on to make a new low.

This confirms to me that the bears are somewhat in control of the market and that I want to be looking for a low risk, high reward place to enter short. To do this, I look for an intraday area of short term support that I can use to manage my risk around if price retests it. That's the grey box drawn from the second x that I've marked on the chart.

If price can come out of the box to the downside, we should see momentum take over and new lows form pretty easily, while even if it doesn't hold, there's still plenty of resistance above while price is capped by the broken trend line.

Best of probabilities to you.

Dane.

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