Trade Idea: EUR/JPY - Hold Short Entered at 134.65

EUR/JPY - 134.00

Most recent candlesticks pattern : Hammer
Trend : Sideways
Tenkan-Sen level : 134.23
Kijun-Sen level : 133.18
Ichimoku cloud top : 135.32
Ichimoku cloud bottom : 133.95

Original Strategy : Sold at 134.65, Target: 133.25, Stop: 135.20

New trading strategy : Hold short entered at 134.65, Target: 133.25, Stop: 134.65

Despite rising to an intra-day high of 134.94, the single currency did retreat after staying below resistance at 134.99 and the pair just tested the Ichimoku cloud bottom, this has retained our early bearish expectation for a retreat back towards the Kijun-Sen (now at 133.18). Looking ahead, it is necessary to see euro breaking below support at 132.98 to confirm the rebound from 131.41 has ended at 134.99, then weakness to 132.77 (61.8% Fibonacci retracement of 131.41 to 134.99) would follow but downside is likely to be limited to 132.30/40, then we shall see further choppy consolidation above temporary low at 131.41.

Therefore, we are holding on to our short position but we are lowering our stop to with stop to break-even (i.e. at 134.65) and only above 134.99 would dampen this near term bearish view and another bounce to 135.17-38 resistance area (this is also the current level of Ichimoku cloud top at 135.32 and approx. 50% Fibonacci retracement of 139.26 to 131.41 at 135.33) cannot be ruled out, break there would confirm the decline from 139.26 top has indeed ended at 131.41, then stronger rebound to 136.26 (61.8% Fibonacci retracement of 139.26 to 131.41) would follow.