EUR/JPY Forecast Today 11/08: Builds Bullish Flag (Video)

(MENAFN- Daily Forex)

• The Euro has rallied a little bit during the trading session here on Friday as we continue to build a bit of a bullish flag.
• I think this is a candlestick formation that pretty much everybody can pay close attention to and see quite obviously.
• What I find interesting about this bullish flag is that the 50 day EMA sits just below the 170 yen level, which is also the bottom of a part of the bullish flag that people would expect to offer support.
• If we can break to the upside, the 173 yen level is a resistance barrier and target. And if we can break above there, then I think the market is likely to go look into the 175 yen level.

If We Were to Break Lower

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On the other hand, if we were to break down below the 50 day EMA, then I think you will probably see this market drop pretty significantly, perhaps down to the 166 yen level. Keep in mind that this is a risk appetite based currency pair, and the Japanese yen of course is represented by the Bank of Japan, which has a major issue on its hand.-p src= data-src="" alt="EUR/JPY Forecast Today 11/08: Builds Bullish Flag (graph)" title="EUR/JPY Forecast Today 11/08: Builds Bullish Flag (graph)" class="img-responsive center LazyLoading" lazy=loading>

In other words, it has to deal with the bond market in Japan, which is horribly unsubscribed to on some days. And in fact, there's been days where there's been zero bids for Japanese debt. So, with that being said, it's not a surprise to see that the yen is struggling against a lot of currencies. And in fact, it's even starting to struggle a little bit against the US dollar, which of course has been sold off by pretty much everybody.

EURUSD Chart by TradingView

So, if we can break above the 173 yen level, I can imagine a scenario where we rally another 1000 pips to about 183, maybe 182, we'll just have to wait and see. But this is obviously a market that you get paid to hang on to as far as interest rates are concerned. So, I like buying dips, I also like buying breakouts.

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