Another round of mid-tier reports is due from the euro zone, so I’m looking at another euro pair to play the ongoing downtrend.
Currency Snapshot:
Fresh Market Headlines & Economic Data:
- Australian NAB quarterly business confidence index down from -2 to -11
- Japanese gov’t looking into tax exemptions for businesses affected by pandemic
- U.S. Congress mulling another massive stimulus package
- Trump expects output deal between the U.S. and Russia “soon”
Upcoming Potential Catalysts on the Economic Calendar:
- U.K. Nationwide house price index at 7:00 am GMT
- Swiss CPI at 7:30 am GMT
- Spanish unemployment change at 8:00 am GMT
- Euro zone PPI at 10:00 am GMT
What to Watch: EUR/JPY
In yesterday’s update we were watching the break-and-retest setup on the hourly chart of EUR/USD. This time, I’m switching to EUR/JPY with this sweet bearish pullback opportunity.
The pair has been forming lower highs that can be connected by a falling trend line, which happens to be right smack in line with the 61.8% Fib and 100 SMA dynamic resistance.This slower-moving MA is below the 200 SMA to confirm that the selloff is more likely to gain traction than to reverse, so price might soon revisit the recent lows at 117.00 or even form new ones!
Economic figures from the euro zone have been mixed so far this week, but it looks like market watchers are pricing in more pain for the region in the months ahead. Heck, it even looks like the lower Fibs might hold, so scaling in might also be a good strategy for this pair.
Just make sure you check the average EUR/JPY volatility when setting stops and profit targets!
