EURJPY has reached a high of 117.27 so far this morning, breaking above a pennant. I have some very attractive price targets for this pair, beginning at 119 and going up to 126 from various methods.
However, be cautious. First, the yen loves bad news—more bad news from Japan's nuclear cleanup efforts could send this pair plummeting. Second, there has been much choppiness over the past two days. This means the market is nervous even though there seems to be better risk appetite this morning.
Note on the daily chart below that the pair hasn't been above 117 since May 2010. This price is parity. It's also at the top of the multi-month rectangle. It would be logical to expect some reaction here and if one wants to go long, waiting for a pullback would be smarter than jumping in at the high.
Resistance is 117.27, 117.60, and 118.27.
Support is at 116.00, 115.54 and 114.57.
Here's the daily chart:
© Dianne Fecteau, 2011. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author. My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.