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EUR/JPY Technical Analysis: ECB-Weakness a Mere Blip in the Trend

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by , 12-22-2016 at 09:43 PM (1005 Views)
      
   
In our last article, we looked at the potential for a new higher-low in EUR/JPY after the European Central Bank extended QE. After this announcement, the Euro was offered-hard across-the-board, but as we noted, the ‘bigger picture’ trend in EUR/JPY has been quite bullish, and traders would likely want to use that short-term weakness to position-in to longer-term bullish strategies.

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The level that we pointed out around 120.85 had helped to set support after that ECB-inspired move-lower; after which EUR/JPY ran-up to set a new short-term swing-high at 124.09.

So – to put this in scope – after the European Central Bank extended their QE program, creating weakness in the Euro against most currencies, EUR/JPY merely set a higher-low which then led-in to another higher-high just a week later. This is indicative of a market being driven by a ‘bigger theme,’ and that’s the prospect of continued Yen-weakness as we move into 2017. This is also something that can make top-side continuation, particularly on a longer-term basis, quite attractive.

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