Fundamental analysis:
EUR
Bearish:
10 point rate cut announced by the European Central Bank (ECB) and they have already been cutting rates before
20 billion per month in asset purchases
Looming economic crisis in the Eurozone
A lot of retail traders are now long upon the rally after the ECB announcement
JPY
Bullish:
Considered a safe haven currency
Strong economy
Big savings in the eurozone (France primarily) and they are looking to pull their money out since there is a crisis looming in Europe
So I am actually shorting the "risky currency" against a "safe haven currency"
Technical analysis:
In the highlighted boxes are the key monthly levels. EURJPY has been in a downtrend for a few months now.
In my view we are going to touch 120.00 - 120.20 again (this is a key monthly level, and in my view, in this strong downtrend, and with these bearish fundamentals surrounding the euro, should be hard to break), then down again to the 20 day moving average (daily chart) at around 117.90 - 118.00 (which is where I will close a part of my trade) and then further downside into the 116.00 area which is where I would like to take profit.
We could see a push up to 122 - 123 levels before going down again but I consider my trade invalid after we break and have a daily close above 121 level.
I am also opening a long term short on this pair with low leverage and keeping it open because I see a lot of downside potential in this pair. Target 110.000 and then even 100.000.
EUR
Bearish:
10 point rate cut announced by the European Central Bank (ECB) and they have already been cutting rates before
20 billion per month in asset purchases
Looming economic crisis in the Eurozone
A lot of retail traders are now long upon the rally after the ECB announcement
JPY
Bullish:
Considered a safe haven currency
Strong economy
Big savings in the eurozone (France primarily) and they are looking to pull their money out since there is a crisis looming in Europe
So I am actually shorting the "risky currency" against a "safe haven currency"
Technical analysis:
In the highlighted boxes are the key monthly levels. EURJPY has been in a downtrend for a few months now.
In my view we are going to touch 120.00 - 120.20 again (this is a key monthly level, and in my view, in this strong downtrend, and with these bearish fundamentals surrounding the euro, should be hard to break), then down again to the 20 day moving average (daily chart) at around 117.90 - 118.00 (which is where I will close a part of my trade) and then further downside into the 116.00 area which is where I would like to take profit.
We could see a push up to 122 - 123 levels before going down again but I consider my trade invalid after we break and have a daily close above 121 level.
I am also opening a long term short on this pair with low leverage and keeping it open because I see a lot of downside potential in this pair. Target 110.000 and then even 100.000.