EUR/JPY: Second visit to the 200 EMA, 1 hour chart

The 200 period exponential moving average could act as a good support or resistance zone, especially on the higher time frames. On the one hour chart of the EUR/JPY we can see that on the first visit that the price made to the 200 EMA (blue line), it bounced from that level to the upside, but it couldn’t make a higher high and it has now come back to that same level, around the 130.10. The bounces from the 200 EMA are more reliable on the first visit, on the subsequent visits the chances of seeing a breakout are higher than seeing a bounce. That is why we should be attentive to a possible breakout of that moving average to the downside, but the best thing to do is to patiently wait for confirmation of the breakout in the form of two or three bearish candles, and then the pullback to the same EMA for a possible short entry.