Follow up to the post yesterday titled: Forex Technical Analysis: EURJPY has sellers at 137.00 and buyers at 200 hour MA
EURJPY finally breaks below 200 hour MA. Now resistance.
Yesterday, there was a report that Morgan Stanley initiated a short in the EURJPY at the 137.00 level. When I looked at the chart, the price had indeed moved lower but was testing the 200 hour MA and holding. Hence the title of the post.
Long story short, the price ping ponged a few times between the 200 hour MA (green line in the chart above) and the 137.00 level. Finally, the level was broken earlier today.
The low has extended down to 135.68 and is bouncing a bit.
What was once support, now becomes resistance, so traders who are short (or who want to go short),can now use the 200 hour MA (and the 100 hour MA – blue line) as resistance now (RISK defining level). I would expect the price to find sellers against this area now as typically, when the 100 and 200 bar MA converge with the price, there is a trend like move away. The break lower, puts the sellers in control. So like Morgan Stanley, the technicals point to the downside. A move back above the 100 and 200 hour MA would muddy the water, make me question the break. RISK is a move above.
