This weeks analysis will focus on a EURJPY Trend Continuation move. I always look at multi-time frame analysis to give me a helicopter view on overall price movements.
So, starting on the monthly chart we can see that price is being contained and now squeezed within this wedge pattern. To give you some perspective, this has been forming since 2008. I’m potentially looking at jumping on a move down to to re-test the bottom of the wedge pattern.
Weekly chart sees a huge low test rejection at the 200 ema zone. RSI is starting to bottom out too, indicating that price may start a pullback phase.
Daily chart and we can clearly see that price is making lower lows from a swing high that formed in Feb 2018. So with this we can draw on a descending trend-line from the swing highs.
So how will i get involved in this. Well for starters I will look at building out a kill zone around the 20/50ema zone on the daily, which happens to be at a strong support and resistance level. If you’re not familiar with building out these zones, I suggest watching Jason Graystone from TierOne Trading and his Trend continuations methods. Next I need deceleration of price movement. By this I mean a sense of a stall, a reversal or a confirmation candlestick set up and a further test of the trend-line to confirm.
The 4 hour and 1 hour time-frames gives me further confirmation that a move the upside is starting to form. Price is now buoyant at the 20/50ema cross and we could run into a little heat at the 200ema that’s sitting in the middle of the kill zone.
I’ll be looking at taking targets at the re-test of the low. However, I will monitor this as a weekly support area below is in the trajectory of the ascending trend-line that connects the wedge pattern.
Thanks for watching my EURJPY Trend Continuation analysis. I’ll keep you posted as to how this plays out.