EURJPY has shown considerable price rallies upon below-mentioned patterns, the uptrend seems to be dragging further but little edgy at 21-DMAs for today.
Technical chart and candlestick patterns formed – Hammer pattern candles pop-up at 122.663 levels that evidence upswings, whereas long-legged doji and hanging man patterns counter at 124.040 and 124.265 levels respectively. Consequently, these bearish patterns have hampered previous bullish momentum, and the attempt of upswings are restrained below stiff resistance of 125.108 levels.
While on intermediate trend also, bearish engulfing pattern evidences price drops below EMAs (refer monthly chart). For now, the current major downtrend most likely to prolong on bearish EMA and MACD crossovers that are backed by both momentum oscillators (both leading indicators, RSI & stochastic curves) shows downward convergence to signal bearish strength & intensified bearish momentum and weakness remains intact on monthly terms.
Trade tips: On trading perspective, at spot reference: 124.668 levels, it is advisable to trade tunnel option spreads, using upper strikes at 125.108 and lower strikes at 124.043 levels, the strategy is likely to fetch leveraged yields as long as the underlying spot FX remains between these strikes on the expiration.
Alternatively, we advocate shorts in EURJPY futures contracts of mid-month tenors with a view to arresting potential dips.
Currency Strength Index: FxWirePro's hourly EUR spot index is flashing at 6 levels (which is neutral), while hourly JPY spot index was at -13 (neutral) while articulating at 06:52 GMT .
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