Purple horizontal line is 1M fib retracement; gold and silver horizontal lines are 1W fib retracements
EUR fell hard to JPY the past few days but finished Friday with a at near-term support. Considering the appeared in an area that does not necessarily show that the support is strong, I do not think the pin alone is a good signal for a potential trade setup. However, looking back at January 3rd just as the market was pushing a new low, a giant was posted. This is more pronounced if viewed from the 1M time frame as January also formed a . Unlike the more recent pin, the ones posted in January were formed around multiple fib retracements.
Looking at indicators on the 1D we remain above the cloud which suggests short-term up-trend. The conversion line of the is approaching the base line, also seen on with an actual cross, which suggests potential for an entry point. remains above 40 confirming momentum is still in play but weak. In a position like this I think a limit would be best set around our previous high at 127.3 while leaving some open for the next leg up. For perspective we are narrowing in a broader that can be seen on the 1M chart. For reasons I have laid out I think there is more momentum for the bulls, but I also believe this comes at high risk. Alternatively waiting to see if prices retest nearby support at fib lines could provide a better, less risky opportunity.
EUR in general has been hit hard recently in the EUR/USD and EUR/GBP markets, recording sharp drops around major lines of support. However, in both markets we can see with the and . It is also worth noting that neither the U.S. or G.B. are sound economically as we see major U.S. indices faltering and have no clear idea of how Brexit will play out; I believe the recent sharp moves may be the result of speculation and not necessarily a sign of EUR weakness, especially relative to USD and GBP. Looking at EUR/CHF we see a similar situation to EUR/JPY , that is evidence that a bottom may be forming. Considering JPY and CHF are often considered stable currencies, especially compared to USD and GBP, I think it suggests momentum that EUR is trading higher and showing in respective markets.
Would love to hear any ideas or comments. Have a good weekend.