EUR/JPY Sees Euro Recovery Test as Market Volatility Continues

The EUR/JPY currency pair saw a euro recovery test against the yen on August 6th, following the recent intervention by the Bank of Japan and US authorities. The market has become increasingly volatile, making it a 'dangerous and scary place' for some traders. However, Christopher Lewis, a technical analyst at DailyForex, believes that fortune favors the bold, as the interest rate differential continues to favor the euro.

According to Lewis, the European Union's stronger economy is helping the overall attitude towards the euro. He notes that yen-denominated pairs tend to see upward momentum on Wednesdays, especially with the triple rollover of some brokers. This could potentially benefit the EUR/JPY pair in the short term.

Lewis emphasizes the importance of technical analysis and risk management in navigating volatile market conditions. He suggests that traders should focus on clear support and resistance levels, trend structure, and potential reversal points. In this case, he recommends buying the EUR/JPY pair above the 182.50 level, with a stop loss at 181.33 and a target of 184.50.