Skimming along the MA level/50%
The EURJPY fell with the other EUR pairs on the back of Draghi's "dovish" comments. There are some that are saying it was really a taper of policy but that may be for a different day.
In any case, the price moved lower, and the technicals contributed to the fall. Admittedly, the market was choppy before and through the first minutes. The price spiked above the high from Monday. But then it started to fall back down.
- The broken trend line was rebroken.
- The 100 hour MA was broken at 121.94 area
- The area defined by swing highs and lows between 121.88 and 122.01 was broken. (yellow area).
Those breaks, took the chop out and gave the sellers the go ahead to sell.
The fall has taken the price back down to the 200 hour MA (green line) and the 50% of the move up from the December 5 low. That comes in at 121.00 (nice round number for the 50%) and the 121.137 (currently) for the 200 hour MA. The low for the day stalled at 121.047.
What now?
It is about that area on the downside between 121.00 and 121.14. break below is more bearish. With 120.45 the next target.
What would give the buyers more love?
Get back above the 121.56 area is step 1. Then the 121.88-122.00 area.
We are closer to the bottom level. The bounce off the support is not racing but support is support. Traders lean ag support with stops below. So that is the trade - for now.
PS the EURUSD is also near key support at the 1.0600 to 1.0605 area. When two related pairs are in synch, each pair can trade the same story. If it holds for both, the price corrects higher. If it breaks for both, the selling in each can gather some additional speed.
