Although EURJPY saw mild price rallies yesterday, weakness is quite visible upon below-mentioned patterns, the trend for the day appears to be absolutely edgy (sideways) but with little weakness.
Technical chart and candlestick patterns formed: Shooting stars have occurred at 123.323 and 123.256 levels on the failure swings at the stiff resistance of 123.620 levels (refer daily chart).
While hammer pattern candle pops-up at 126.601 levels that evidenced upswings, whereas bears hamper upswings below 7EMAs, consequently, prices have been plummeted prices towards 4-months lows (refer monthly chart).
The bearish engulfing, in the intermediate trend, evidence price drops below EMAs (monthly chart). For now, the current major downtrend is most likely to prolong bearish swings that are backed by both momentum oscillators as both leading indicators (RSI & stochastic curves) show downward convergence that signal bearish strength and the intensified selling momentum and weakness remains intact on the monthly terms.
Trade tips: On trading perspective, at spot reference: 122.960 levels, it is advisable to trade boundary option spreads, using upper strikes at 123.0590 and lower strikes at 122.791 levels, the strategy is likely to fetch leveraged yields as long as the underlying spot FX remains between these strikes on the expiration.
Alternatively, we advocate shorts in futures contracts of mid-month tenors with a view to arresting potential dips.
Currency Strength Index: FxWirePro's hourly EUR spot index is flashing at 29 levels (which is mildly bullish), while hourly JPY spot index was at -92 (bearish) while articulating at 05:33 GMT.
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex
