If you use the classical methods of analysis to trade, you likely made money from the EUR/JPY. The pair declined yesterday by more than 180 pips after it touched the downside trend line around 123.25. This trend line is so strong because we saw 4 tops formed around that and we had to sell the pair at the beginning of the week.
If you didn’t sell the pair yesterday, you can still make some money today based on our analysis. The EUR/JPY has risen today after the Japanese bank kept the official rate negative at -0.10%. Additionally, Draghi’s speech this morning in Frankfurt caused the pair to trade around 121.90 now and we can see a resistance area at 122.14 which is the average price for the last 50 H4 candles. The pair might make a correction wave to these levels and decline again.
The stochastic and RSI Indicators are giving us the buy signal. This means the pair is making the correction especially to retest the broken short-term trend line.
The Next Few Days
Based on this analysis, we can sell the pair when we see a bearish candle around the broken trend line at 122.15 and make our target at the supply zone at 120.50-90; if it rises we can sell it again at 123.10.
We have to be careful about upcoming hot news like the ECB's leader Draghi's speech next Wednesday, February 2.
