EUR/JPY - Technical Analysis and Trading Recommendations 2012-04-10

Technical Outlook:
After registering a low near 106.00, the pair has pulled back smartly as expected. Immediate resistance is between 108.00 and 108.60/70. As soon as the pull-back is over, the bearish tendency is expected to reach 105.50 and 105.00 levels (Support region) at least. As shown below, resistance level 110.00 is considered as a strong one. Intraday counter rallies are to be expected towards 107.50 and 108.60/70 levels. It is recommended to re-enter short positions at 108.60/70 levels targeting 105.50 in the near term.


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Chart Setup and Trading Recommendations:
As it is shown on the chart, there are 2 trading counts setting up here.
1. The EUR/JPY pair has remained in a secular bearish trend, but as it is shown above, a dropping trend line has been broken and prices are retracing before resuming to the upside. Considering the current situation, we expect prices to fall down towards 102.00 levels before resumption of the movement.
2. The retracement could have ended yesterday, close to 106.00 levels and EUR/JPY is headed towards registering a new high! We recommend the following trading strategies.
Trade Setups and Recommendations: Issued earlier on April 4
1. Book profits on short positions initiated last week.
2. Short-term: Buy at 107.00-107.20, Stop at 106.00, Target at 108.60.
3. Mid-Term: Initiate Sell at 108.60, Stop at 110.00, Target at 105.50
Best wishes.