We’re all about the yen today as we talk about a cool short-term trend on NZD/JPY and a longer-term range for EUR/JPY. What do you think of their charts?
NZD/JPY looks like it’s juuuust breaking above a consolidation near 72.50.
In case you haven’t looked at the chart yet, an upside momentum means that the pair is bouncing from the 100 SMA that also happens to line up with an ascending channel on the 1-hour time frame.
Can the bulls sustain their momentum? Buying at current levels would give you a good reward-to-risk ratio especially if you aim for the previous highs near 73.00 and place your stops just below the 100 SMA.
Feel like shorting NZD/JPY instead? That’s fine, you can also wait for a break below the channel and the SMA and aim for the area of interest near 72.00.
Touchdown! EUR/JPY has hit the 121.00 major psychological handle, a level that has been supporting the pair since late May.What makes the setup more interesting is that there’s a low key bullish divergence on the 4-hour time frame.
Buying at the earliest signs of bullish momentum is a good idea especially if EUR/JPY ends up rising to the range resistance near 123.00.
If you’re not comfortable buying the euro, though, then you can also wait for an epic downside breakout. Watch out for a break below 121.00 and see if EUR/JPY reaches its January spike to the 118.85 area.