Shorting the Pullback in EUR/JPY
Skerdian Meta • 1 min read
EUR/JPY has been bearish for a long time, since the Euro has been declining everywhere, as the Eurozone economy weakened last year. This year, the spread of coronavirus has hurt risk currencies further, while safe havens such as the JPY have gained pace.
As a result, EUR/JPY made some strong bearish moves this month. But, we have seen two very decent pullbacks higher on the H4 chart, once last wek as EUR/USD surged higher for no reason and once this week, as the safe havens are retreating lower, also with no particular reason, because coronavirus hasn’t matured yet.
Today we saw another bullish move in this pair, as USD/JPY is heading towards 108, but I think that this is just a dead cat bounce, because the virus is still spreading and governments are shutting down life one after another. But, the 100 SMA seems to be holding as resistance, so we decided to open a sell signal, just below that, targeting 107 and with a stop above last month’s high.