Double Top in EURJPY?
With all the other currencies galloping higher EURJPY is telling us something, which is that it is weak relative to the other pairs. In trading “buy strength” and “sell weakness” are axioms always worth noting. It applies to individual markets and to groups of markets. It can be said that if EURJPY can clear resistance at approx 137.50 it may be in a position to play catch-up – that, however, is not how markets work. We would never look to buy a laggard, just as we would never look to sell a leader. It’s the equivalent of betting on a last place team to win because they are due. They are in last place because they are the least best.
In the chart below we see a rather large potential double top in place with negative divergence between price and momentum. As experienced analysts we know not to anticipate a move in either direction, but to go whichever way the market wants to go. If today’s daily chart does give us a doji that spells indecision.
Regardless of which way it moves it is very telling that it is still below the April high, and definitely in the bottom half of the pack, compared to the rest of the horses…
Jay Norris
