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EUR/JPY technicals and trade setup

FX:EURJPY   Euro Fx/Japanese Yen
152 0 11
EUR/JPY forms “Shooting Star” at resistance of 124.445, major downtrend sliding in “Falling Wedge”:

This week’s price bounces have now tested and rejected resistance at 124.445 levels ( daily charts ).

A “Shooting Star” pattern occurs at resistance of 124.445, as a result, we see bears resuming again, current prices testing supports at 123.6212 (21DMA), slide below 21DMA to bring in more slumps.

So short term bulls seems absolutely exhausted as leading oscillators diverging to the previous rallies.

On a broader perspective, the current prices remain below EMAs despite attempts of bounces; downtrend has been slipping through falling wedge formation (see monthly charts).

Volumes are in conformity to the major downtrend - See huge volumes on dipping prices.

Leading oscillators has been converging to the major downtrend.

MACD with bearish crossover has just entered into zero levels which is bearish territory.

This month, the pair tested supported near 122.028 levels (Wedge base & 50% Fibo levels) but we could now foresee all chances of failure swings and break below these levels.

So, we view the current price rallies as momentary gains as the major downtrend offers more shorting opportunities.

Option Trade Tips:

On intraday perspective, it is good to buy one touch binary puts for targets of 123.3599 levels.

Capitalizing on these deceptive rallies, you decide to initiate a bull put spread at net credits when IVs are reducing which is good news for option writers.

So, go short in 3D (-1%) in the money put with positive theta if you expect that EURJPY             will spike up moderately over the next near future but certainly not beyond your imagination, simultaneously, buy 2W at the money -0.5 delta put option.

Notice in this instance that the put we bought is out of the money and the put we sold is in the money with an anticipation of EURJPY             could either rise or remain unchanged in next 3 days time, but there onwards slumps would be taken care by longs in ATM put and your active longs in spot FX would be protected.
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