The EUR/JPY pair fell during the majority of the Monday session, in order to break below the 96.50 level. The pair has been sold off rather drastically over the last couple weeks, and appears that we are currently slowing down the dissents of the Euro against the Yen.
The bounce that we saw later in the session did form a hammer, and it cannot be lost that the hammer is roughly around the same level as the one that we saw back in late May. At this point in time, it looks like we are trying to form a little bit of a double bottom, and as such this is one of the few places that I would consider buying the Euro.
However, I believe that it's probably going to be safer and easier to simply sell this pair from higher levels. The hammer does of course suggests that we are going to bounce, but I feel that any time you by the Euro, you have to worry about headline risk. As such, it is almost like walking through a minefield, you just simply don't know what the next step could bring.
99
I believe that the 99 handle will be rather resistive, and I think that selling from that area is probably going to be easier than buying from this one. The problems in Europe are simply far too numerous to list, and those are just the ones that we are aware of. I think the bounce makes sense though, as we are at the very lows but it is only a matter of time before the level gives way. Remember, this is not the value of the Yen versus the Dollar, which the Bank of Japan is much more interested in. Don't get me wrong, the Bank of Japan doesn't want this pair to fall to drastically either, but as long as the Dollar stays relatively buoyant against the Yen, intervention is very unlikely.
If you are aggressive enough, and the short term minded, there is a buying opportunity on a break of the Monday highs for you. However, if you were like the rest of us and don't have the time to sit and stare the screens there may be a better trade above as you would sell at resistance, and with the overall trend.