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EUR/JPY Forecast 06 Mar 2014

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EUR/JPY Chart 05 Mar 2014
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The Euro has started is consolidating against the Japanese yen

With the main news flow skewed to the positive side, the Euro has managed to stay afloat ahead of the market moving ECB press conference tomorrow. That said, you have to be very careful with the market tomorrow, as there are tons of events that can affect market prices.

We are quite neutral at this point in time on the EUR/JPY binary options forex pair. You would need to take into account the volatility that is likely to happen between 12:45 and 14:00 tomorrow to take a decision on this one. Following are our thoughts for the time being.

We are clueless as to what might ECB President Mario Draghi say at tomorrow's press conference, however we are very aware of the fact that it will be a market moving event in any case. So to get some ideas about trading, we will need to have a careful look at the chart.

The pair has tanked lower on Monday as the market opened following disruptive events in the Ukraine - Russia spat over the weekend. Prices have tested support around 139.15 and have rebounded sharply on Tuesday as it became clear that Putin is not going to imminently threaten Ukraine.

As tensions have receded, risk assets across the board have started rallying sharply. The main stock indices in Japan, Europe and US have boosted risk appetite of Japanese investors to trigger an outflow of cash into foreign assets - the EUR/JPY has rallied to set a daily high at 140.55.

Today the pair has tested the downside, correcting somewhat from yesterday's substantial spike higher, only to find itself on the bid side again. A low at 140.18 has been set, which will be our trigger level if we would like to buy daily calls for tomorrow on this pair, at this point in time.

The upside is capped by 140.78 which was set earlier in today's trading. If we see a sustained break above it is very likely that the trend will continue to the upside. Be careful for a sustained break below 140.00 - it opens the floodgates to the downside.

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