EUR/JPY hammer on a dynamic and static support level
As we can see from the chart above, the cross is right on a short-term dynamic support (trendline), which has been touched with a very sharp move. Moreover, this dynamic support coincides with a static support level (around 121.22), adding confluence to the analysis. However, before entering the trade, I'm waiting for a confirmation, which I expect to appear on lower time-frames.
Nonetheless, uncertainty remains high in the markets, as Christine Lagarde takes the place of Mario Draghi as head of the ECB, because of her background as a lawyer and not as an economist, but this is not her first expirience in the field of economics. In fact, she has previously served as Managing Director and Chairman of the Internetional Monetary Fund since 2011. However, she won't take charge before November, 1st.
Therefore, if I were to open a long position on this cross, I would either close it before the 25th of July (ECB interest rates decision), or move the stop loss (more on these details in a minute) to break even; while data on inflation in the Euro zone are to be released on Wednesday (Previous: 1.2% - Forecast: 1.2%).
Moving to more technical stuff, if confirmation was to be seen, I would open a long position with a target 123.35, and a stop loss of 120.83, with a Risk/Reward of 1:5.3. But there's another level of concern a bit under the target, the resistance zone of 122.4, which should be taken into account in case of a rally.
Nonetheless, uncertainty remains high in the markets, as Christine Lagarde takes the place of Mario Draghi as head of the ECB, because of her background as a lawyer and not as an economist, but this is not her first expirience in the field of economics. In fact, she has previously served as Managing Director and Chairman of the Internetional Monetary Fund since 2011. However, she won't take charge before November, 1st.
Therefore, if I were to open a long position on this cross, I would either close it before the 25th of July (ECB interest rates decision), or move the stop loss (more on these details in a minute) to break even; while data on inflation in the Euro zone are to be released on Wednesday (Previous: 1.2% - Forecast: 1.2%).
Moving to more technical stuff, if confirmation was to be seen, I would open a long position with a target 123.35, and a stop loss of 120.83, with a Risk/Reward of 1:5.3. But there's another level of concern a bit under the target, the resistance zone of 122.4, which should be taken into account in case of a rally.
