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Lucas: Bearish sentiment returns to EURJPY

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EURJPY has seen a steep bearish reversal since hitting a sixyear high in December. The decline began on the day the European Central Bank’sinflation rate fell into negative territory for the first time in history.Steve Lucas from 3c Analysis is calling for EURJPY to continue to fall lowerafter a small round of profit taking.

The currency cross has been trading below its 50, 100 &200 moving average rates all year, following the decline in the euro. Investorsare focusing on the possible announcement of a quantitative easing programmefrom the European Central Bank on Thursday. The Bank of Japan decided not toexpand its bond-buying programme on Tuesday and cut its inflation target to 1percent.

The negative sentiment in the market is signaling a move towardsFriday’s low of JPY 134.70. Steve is looking to sell at the market open andagain at JPY 136.75. He is targeting a drop to JPY 135.14 and then JPY 134.70. Astop can be placed at JPY 137.22.

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