Trading on the EURJPY correction

Usually cool and well-balanced EURJPY becomes an object for speculations because the correction is expected very soon. Finally, traders probably will get it.

Basic arguments:

In fact, interest rates have no significant difference, which means that there will be no particular default movement. The only thing that makes the currency pair to move is investment attractiveness as well as reporting seasons. The forward rate indicates the strengthening of JPY.

Technical arguments:

The current situation seemed to be very much like a turn figure of "double bottom". Such a situation is highly likely to happen even after a long term trend. Most probably, we should expect a correction.

Analysis of big traders:

Picture 1. A chart of EURJPY with the index of big traders for the period of 02.06.2019 - 02.07.2019.

As we can see in picture 1, the correction, which started a month ago is not yet formed well because traders reduce their positions to make the price stable and reduce volatility. So, in the near future, we can expect sideway movements with the amplitude reduction.

Forecast:

In a short-term outlook, we may expect a sideways movement with the amplitude reduction. It implies the UPWARD movement according to the forward price forming.

We recommend you to use the following indicators for comfortable trading:

1) Stochastic

2) Bollinger lines.

Positions ration: to keep the level of risk moderate, the optimal position will be: 4 trades "up", 3 trades "down".