EUR/JPY: Case To Sell On Strength

In light of the negative risk backdrop expected, one would expect the JPY to be well positioned to capitalize on the weakest currencies. On my radar, I can think of two in particular (EUR, AUD). The former looks particularly attractive from a technical standpoint, as the current rebound is faced with a plethora of converging bearish technicals such as the rest of a broken resistance-turned-support circa 124.35–40, a downward sloppy 25-HMA, coupled with a tap into last Friday’s POC. The trade would be negated should the market structure of lower lows gets violated by a breakout of the 124.70–75 level, in which case, a re-assessment of the conditions will be required.