Forex Trade Update: EUR/JPY Descending Channel

Hold or fold? I’ve got this short EUR/JPY forex position open and price seems to be finding resistance at the top of the descending channel I showed y’all last week. That’s also right around the top WATR and previous week high so I’m thinking it could hold as resistance.

In addition, I’m seeing a slight bearish divergence since stochastic has formed higher highs while price made lower highs.

EUR/JPY 4-hour Forex Chart

EUR/JPY 4-hour Forex Chart

But while the technical signals are looking pretty darn neat, I’m worried that the fundamentals might not be lining up as nicely this time. After all, the BOJ just announced negative deposit rates and the euro appears to be drawing support from risk-off flows lately.

However, the lack of yen-selling momentum after last week’s BOJ decision suggests that forex traders might not be too bearish on the Japanese currency just yet. Come to think of it, the prospect of additional QE from the ECB could prove to be a bigger drag on the euro.

Because of that, I’ve decided to keep this short forex position open for now while watching the nearby resistance at 132.00 very closely. Any indication of an upside breakout might convince me to exit early and cut losses so better follow me on my social media accounts for instant updates!

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