EUR/JPY ANALYSIS

MAJOR HEADLINES – PREVIOUS SESSION
* Japan Q3 Housing Loans rose 4.2% YoY
* Japan Oct. Department Sales fell -6.8% YoY vs. -4.7% in Sep.

Chart: EURJPY



This is one of the more potent trades in an environment of easing interest rates and falling equities (in other words, broad risk aversion). The pair seems to have become stuck in range lately, but it feels like we are nearing a decision point in which we either see a strong rally through the 21-day moving average that further neutralizes the chart in the short term and extends the expectations for further range trading, or a sharp sell-off through the rising line of consolidation that could set up new lows for the pair. We prefer the latter scenario, but would like to see a drop through the 120.00 area and the line first.

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