As Jamie mentioned earlier, the Citi bank technical team issued a sell-strategy overnight in EUR/JPY. They have a stop-loss above 132.50 and a profit target around 125.00. I generally like their analyses but I’m not sure about this one. They have seen 6 daily reversals in the main JPY crosses and in the G10JPY index and they are hoping that short term bearish momentum is strong enough to sustain another 700 pip fall. In my opinion they are trading too close to the ‘middle’ of the short term range and the chances of being stopped are high. (The risk/reward ratio may be excellent but if there is an 80% chance of being stopped then that also does not make sense). I agree we are in a bearish retracement phase after the failure at the 200-day MA but these phases tend to be very choppy rather than straight-line. The 100-day is now at 123.75 and the 200-day is at 135.55 and I would prefer to trade as close as possible to these parameters.
