Hi friends, I had to travel for a few days so missed posting my updates here over the last few days. Anyway, I'm back in town so here's my piece for today:
The Japanese Yen dropped to a new 7-month low against the US Dollar, while the Euro remained strong amidst fears of slipping into recession.
Key support levels continue to give way which in turn encourages more Yen selling. As a result, the Euro rose to a 3-month high against the Yen.
News Watch For EURJPY
German Ifo Business Climate data was released earlier today. Data was better than forecast which means more good news for the Euro. There are no further news releases scheduled for the EURJPY pair this week.
I've been tracking Regular Bearish Divergence on my charts but with the Euro showing some unusual strength, the entry remains elusive. Take a look at the chart below:
You can see that price is hovering around the upper Bullish channel trendline, while the Regular Bearish Divergence pattern remains intact. The breakout of the black, dashed trendline occurred outside my trading hours but we can use this as a trigger for a more conservative entry.
Price has since retreated and went on to form a new High. So, if the Regular Bearish Divergence pattern holds firm, and price breaks out and closes below the low of the breakout candle (red, dashed vertical line), we may enter a sell position.
Potential targets include the 105.700 level and the previous Swing Lows.
For a more aggressive entry, insert a new trendline across the Swing Lows and consider any closes below these lines as potential trigger levels.
We'll have to wait and see how it plays out for now, so be safe out there. All the best!