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EURJPY Weekly Technical Outlook
Price action on the weekly time frame on the EURJPY formed a hammer-like candlestick around an S/R zone last week. The long tail of the hammer or pinbar covers about 330 pips of a 386-pip range candlestick, showing a strong intent of bulls to push price northward. It may be significant to note that last week, price action rejected a support zone just above the support trendline of a broadening wedge (red) which is traceable to April 2017. Very much likely we may see bulls continue the northward push in the days ahead. We should also note that the pinbar is settled on the monthly pivot, and its nose is just a few pips above the pivot. Besides, a consolidation or compression zone is just above the pinbar and we may see bulls push price action beyond the compression zone to retest the high of the bearish candlestick formed two weeks ago, which is around 131.330.
Recent price action on the daily time frame is technically disposed in favour of bulls, given the bullish candlesticks formed last week Wednesday through last week Friday. If bulls are able to successfully contend with the minor horizontal resistance around the 129.600 area, they will face resistance in the descending trendline (black) from the high of February 2, 2018. However, this is quite distant and a buy trade may be a feasible option in the short to medium term.
The technicals on the H4 time frame favour the bulls. The candlesticks recently printed by price action are largely disposed northward. While I am bullish on this pair on a short term basis, I will be tracking how price action reacts to the ascending trendline (magenta) which is currently acting as support. A break of price action below the trendline on at least a four-hourly basis and its retest for a role flip will see me change my bias to bearish on this pair.
I may be wrong. Trade safe and prosper.