The low in early Asian session formed a horizontal channel. A break over the upper boundary of the channel propel EURJPY to test the 133.50 level. Price fade out from that level forming a bearish head and shoulder pattern.
EURJPY reached the Head and shoulders price target and a flat bottom indicated a reversal is imminent.
Enter my first entry with a 123 formation at 7:08(6:08 GMT). Price is expected to break the 133.50 level and tested the opening price. Exited at European open.
Enter my second entry on the short side with yet again 123 formation. Looking for a 20 pips profit. Get the profit target and exited 7:48 GMT.
There is an old saying in the stock market that the first 5 days of trading in January sets the tone for the rest of the year.
If we refer to EURJPY, in the first day of the year i.e January 4th, EURJPY touched above 133.50 before free falling after opening session in New York. The fall bring EURJPY below 133.50 in early Asian session on the 6th January. EURJPY recovered to test the January 4th high. It break that resistance level and touched 134.00 in late New York session on January 7th.
The USDJPY also moved in similar fashion as EURJPY for the first week of the year.
According to Kathy Lien, Director of Currency Research, GFT The seasonality bias in USD/JPY is not as strong as USD/CHF but it is still quite clear that the dollar tends to rise in the month January against the Japanese Yen. Although this trend has been in place for 6 out of the past 10 years, it is also important to note that this pattern has worn off lately with USD/JPY falling 3 out of the last 4 years.
So, where do you go from here..it is hard to tell. Maybe the EURJPY will moved between a range of 127.00 to 138.50 similar to last year movement since the middle of March.
