EUR/JPY Regains Above 61.8% Fibo Level – Risk-off Sentiment in Play
Arslan Butt • 1 min read
The safe haven currency Japanese Yen is facing a headwind as trade war tensions between the US and China continue. Besides that, a contraction in Chinese exports caused worries of a slowdown in the world’s second-largest economy, fueling the risk-off move on Monday, which hurt the US dollar against the Japanese Yen – a safe-haven investment in times of geopolitical turmoil.
Since we don’t have much to see on the economic calendar, it will be nice to trade the technical setup on EUR/JPY. Are you up for it?
The remarks from the US Treasury Secretary Steven Mnuchin have reduced the uncertainty over the trade war. As a result, investors have started moving their investments from safe haven assets into risky investments such as the stock market. The Japanese Yen carries a status of safe haven currency which is why we are seeing a sell-off in it.
EUR/JPY – Fibonacci Retracement in Play
Technically speaking, EUR/JPY is consolidating in an asymmetric triangle pattern which is supporting the pair near 123.850 along with resistance at 125.250.
As per 50-period EMA, EUR/JPY is trading in a bullish trend, which is why we should be looking for buying positions. Moreover, the RSI is also holding above 50, supporting the bullish bias of investors. Most important of all, the Japanese cross has crossed above 61.8% Fibonacci retracement level, while the immediate resistance prevails at 78.6% level at 125.120.
Key Trading Level: 124.05
EUR/JPY – Trading Plan
Fellows, I’m looking to go long on EUR/JPY above 124 with a stop below 123.850 and take profit of 124.650.