Something about EUR/JPY troubles me at the moment. It feels like a pair which is due for a major move in one direction or another. I had been confident for the last few weeks that the move would be down but now I’m not so sure. With the big move higher in equity markets showing little sign of slowing down, perhaps EUR/JPY should be looking to break higher? Or has the correlation between the JPY crosses and equity markets has been well and truly broken. Additionally the markets single-minded preoccupation with the USD is bound to end sooner or later and it is then that we see some big readjustment moves in the crosses.
I was short EUR/JPY last week but closed the position for a small profit and I have now gone long. The short-term charts look to me like they may have formed a bottoming pattern (chart to come a little later) and I think there is potential for a 10% move towards the mid 140’s. If the market trades back below 130 again then I’m re-assessing.
