EUR/JPY Forecast July 31, 2012, Technical Analysis

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By FX Empire Analyst - Christopher Lewis
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The EUR/JPY pair fell during the Monday session as the Euro continues to weaken. While the markets had gotten rather aggressive on the "risk on" trade during the latter part of the previous week, Monday saw a bit of sanity return to the currency markets as the Euro was sold off. Certainly, the bounce had been extreme, and it appears that most traders once given a chance to think about it over the weekend understood that the Euro has structural problems, and not a sudden fixes changing its outlook.

Looking at the candlestick formations, it is very interesting that we manage to break the bottom of the shooting star from Friday which of course has is looking to sell this pair. A break of the Monday lows is a potential selling signal, but it should be stated that the Euro can be sold against other currencies was slightly better looking setups.

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