Technical Outlook:
With each day passing, the EUR/JPY structure is becoming more constructive for the bulls. If you remember we presented 2 possible counts unfolding (please, refer to April 18). At the moment, the probability of a possible bottom formation at the sub 104.00 level seems to be higher. Now the pair is ready to retrace down at least towards 105.50-105.00 in the coming trade sessions. One should consider buying at those levels. Please refer to the charts below for clear view.
Chart Setup:
As seen on the 4-hour chart, prices are stagnant right near the resistance at 107.20/50. Furthermore, EUR/JPY has broken the falling downtrend line from the highs of 111.00. The most probable direction now is a retrace to the rally from sub 104.00 to 107.00 levels represented by AB boundary. It is now expected to form a higher base between 105.00 and 105.50 levels before moving further. In anticipation of this move, we recommend to hold the existing short positions for now. Fresh selling is best to be avoided at the moment.
Trade Recommendations:
1. Hold existing short positions if taken earlier at 105.00 with stop at 107.50.
2. Exit Sell and Buy between 105.00 and 105.50 with stop at 104.00. Target Open.
Best regards,
