I love when a 200DMA is in play. In this case it’s the EUR/JPY that’s battling it out with its 200 period simple moving average that’s got my attention.

The EUR/JPY is maintaining an uptrend although the recent acceleration looks to be making it ripe for a more pronounced correction. That would likely only happen if the bears can kick the 200DMA’s feet out from under it. EUR/JPY The daily EUR/JPY has sunk down to the 200DMA but that’s not the entire story…the 382.% Fibo Retracement level is waiting there too creating a “stacked” level along with the 102.20 minor psychological level.

With the Japanese plan for stimulus which should slow the yen strength in the near-term, the euro should have an easier time gaining some footing against the yen. But the daily EUR/JPY as far as a swing set up is a tough one to justify on the basis of the 200DMA, minor psych, and Fibo level alone because frankly it’s a sold but rather shallow correction. Of course any buy here could simply use the 200DMA and the 102.00 major psychological level as a point of validity (aka stop loss)…but I like having a little bit more than that to go on. Enter the 240-minute EUR/JPY uptrend and 34EMA Wave support.

I think that the 1.0200 could be tested and I’d like to be able to ride that out but not take more heat than that. So the 102.20 level on the 240-minute chart lets me trigger a swing buy at this level (I’ll have the option to buy more down to 101.80) and use the 101.75/70 area as the validity for staying long. Too much momentum south of the 102.00 to 101.80 area and I’m out. EUR/JPY_2 The 240-minute’s swing buy has a one to one risk/reward that actually favors the reward side slightly more. The 102.50 level could present an obstacle to the upside in front of my 102.80 profit target but with the daily trend and (for now) the 200DMA support, I will look for follow-through to the upside.