[Jason_Lim]

Sell EURJPY at 131 with a target of 125.10 (55 day moving average). Stop loss is at 132.50

Yesterday's bearish daily reversal pattern and the breach of the horizontal and channel support around 131 indicates that the short term trend is down and further losses are likely over the coming days.

Note that six of the nine JPY crosses within G10 posted bearish daily reversals yesterday, as did the equally weighted G10JPY Index. Overall the JPY looks ready to strengthen at least in the short term.

The bias is not that this is likely a trend change. We still think the core trend is higher. Rather we are expecting a sharp correction to recent gains before a re-emergence of the topside potential. So in effect this trade is more tactical than core.

[Jason_Lim]

EURJPY: The pair has not quite met the 55 day moving average though one should note there is a lot of support just below current levels at 126.00 where horizontal supports converge with the 55 day moving average and the 76.4% Fibonacci retracement of the last rally from 12th March comes in at 125.73. A breach of this support area would then suggest an extension down to 122.12.