The EUR/JPY pair formed a hammer for the week, and as a result it looks like the market is primed to start going higher again. I frankly, as the Yen had sold off drastically in the middle of the week, a lot of people have stepped in to take advantage of weakness and a market that is without a doubt very strong overall. Going forward, we fully expect this market continue higher, and believe that a breakout is imminent. Nonetheless, expect a lot of volatility above the top of the week’s range, as we would be plowing directly into a shooting star.
As for the Monday 10th daily forecast:
The EUR/JPY pair fell hard during the session on Friday, but as you can see bounced just as hard in order to form a massive hammer. This hammer shows extreme amounts of yen selling, and as a result we think this market will continue higher. Obviously, the 130 level should offer a bit of resistance now, but in the big scheme of things we think the Bank of Japan will continue to work against the value of the yen going forward, and there is also the possibility that the Euro will breakout as well. All things being equal, we are buyers.
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