Today the world is awaiting the jobs report from the USA after the Fed raised the interest rate in Dec 2016 for the second time in 12 months. It’s expected that this report will affect all instruments, including the EUR/JPY which we’re going to analyze today.
The EUR/JPY currency pair is trading now around the 123.00 key resistance area which is in the middle zone between 38.2 and 50% fibo from the correction wave that started after the Brexit. It might rise up to 125 and drop back down again to the medium term trend but in the short term we’re expecting that it will touch the upper limit of the wedge and back again. However, the SMA 50’s slope is horizontal which means the pair does not have the power to resume the movement.
The RSI and Stochastic indicators are still giving us buy signs so we would wait for the sell signal to enter the market.
The Next Few Days
We can sell the pair when we see it around 123.50 and make our first target at 121.90. If the pair breaks the wedge, we have to sell it again to 119.00. On the other hand, if it breaks ip from it we can buy it to 125.
We have to be careful about the Non-Farm report today from the USA at 13:30 GMT, especially since we learned that one of the statements from the FOMC minutes on Wednesday was the possibility of unemployment undershooting the level at which the central bank believes it should settle in the long term.
