Although the intraday price action has been nothing but selling for the EUR/JPY, Ichimoku models along with a confluence of lines suggest there is a clear Line in the Sand for the EUR/JPY just a few cents below.
Taking a look at the daily chart for the pair, we can see how Senkou Span A (White Line for Cloud top) is parked alongside the Tenkan (white line below price), the 20EMA (blue line) and the Kijun (red line below price). It does not happen often all three of the Ichimoku lines come together in such a spot along with the 20EMA. This could offer a short term day trading opportunity taking a light long position looking for a bounce on the pair. It could also be a line in the sand for this pair, as any daily close below the triumvirate of lines would be a technical bearish signal, either through new sellers coming in or current long positions paring back.
A couple of interesting points to note on this chart are todayâ€™s candle for starters, whereby we are in danger of this candle being a bearish engulfing candle which would also prompt some sellers to come in. Further supporting the bullish camp is the CCI and Momentum both making similar highs while price has not made it to the previous highs.
When the oscillators are ahead of the price, it usually means price will have to follow suit so the stronger oscillators would support a more medium term bullish view, thus suggesting a re-challenging of the yearly highs at 137.39.
Chris Capre is the Founder of Second Skies LLC which specializes in Trading Systems, Private Mentoring and Advisory services. He has worked for one of the largest retail brokers in the FX market (FXCM) and is now the Fund Manager for White Knight Investments (www.whiteknightfxi.com/index.html). For more information about his services or his company, visit www.2ndskies.com.