- The EUR/JPY has pulled back against the Japanese yen during the trading session on Tuesday, as we continue to see a lot of consolidation.
- The consolidation area could of course attract a lot of attention, with a 50-Day EMA underneath the ¥144 level.
- It is also rising, see you could make an argument for a bit of a trendline, and this of course will attract quite a bit of attention in and of itself.
- Pullbacks in this point still look as if they are opportunities to be buying opportunities, at least in the short term.
Keep in mind that the Euro is overperforming now, against a whole host of currencies. I also believe that the European Union disaster is just waiting to happen and not the currency back down, but at this point, we have the Bank of Japan still fighting the higher interest rates, so does make a lot of sense that we would see a lot of Japanese yen selling off, as the market is being flooded with those currencies. At the same time, as soon as the Euro starts the fall, it could cause more consolidation here as well.
I Have no Interest on Shorting this Market
Looking at the chart, the ¥148 level is crucial, and that of course has been a little bit of a “short-term ceiling” in the market. If we were to break above there, then it opens the possibility of a move to the ¥150 level. In other words, it would kick off the next move. If we turn around and break down below the ¥144 level, then it’s possible that we could go down to the ¥140 level. Either way, I think you’ve got a good shot at having a lot of problems but buyers underneath.
After all, the Bank of Japan is the only central bank out of the major ones that is loosening monetary policy now. The ECB is trying to fight inflation, although they must worry about a lack of growth at the same time, meaning that this pair may underperform other yen-related pairs. Regardless, I have no interest in shorting this market, at least not until the Bank of Japan changes its attitude, or we have some type of major problem with the European Union, which of course is very possible.
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