EURJPY rallies are stimulated ever since the occurrence of the hammer and bullish engulfing patterns at 132.3080 and 133.2100 levels. Thereby, bull swings have gone above DMAs. For now, the extension of rallies seems most likely as 7DMA crosses above 21DMA which is the bullish DMA crossover, and the break-out above stiff resistances to act as a better confirmation.
The stiff resistance is observed between 134.3778 to 134.5000 (61.8% Fibonacci retracement) levels.
On a broader perspective, bulls in consolidation phase retrace 61.8% Fibonacci levels but seem to be restrained at the moment.
On the contrary, we also foresee the rallies likely to extend further upon break-out above 132.3778 levels and bullish EMA crossover indicates the extension of the further uptrend.
RSI on both timeframes shows upward convergence to indicate the strength in the consolidation phase, while stochastic curves have also been the same but signifies overbought pressure but no traces of selling momentum so far.
To substantiate the bullish stance, MACD on both timeframes, evidence bullish crossover and signals extension of the uptrend.
Overall, uptrend sentiment seems to be intact amid minor hiccups ahead of today’s significant ECB meeting.
Hence, double touch option is useful for intraday traders who believe the price of an underlying asset would undergo a large price movement, but who are unsure of the direction.
A trader can use a double touch option with barriers at 134.5000 and 133.7570 to capitalize on this outlook.
Some traders view this type of exotic option as being like a straddle position since the trader stands to benefit from a calculated price movement up or down in both scenarios.
In this case, the trader stands to make a profit if the rate moves beyond either of these levels before expiry, and he/she stands to lose the premium if the rate remains within these barriers.
Currency Strength Index: FxWirePro's hourly EUR spot index is inching towards 65 levels (which is bullish), while hourly JPY spot index was at shy above 28 (bullish) at the time of articulating (at 06:04 GMT. For more details on the index, please refer below weblink:
http://www.fxwirepro.com/currencyindex.
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