FOREX Chart Of The Day: EURJPY Rejects Strong Resistance
#EURJPY was featured in our #Forex market outlook as there was a strong monthly resistance level.
Price is currently rejecting this level, but how can you trade it?
Watch the video to find out more…
Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
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In this video, we’re going to be talking over EUR/JPY. It was outlined in our Forex Market Outlook that we were looking for potential opportunities at 126.12. We outlined the opportunity that the market was coming into a monthly point of control level.
A previous structure low – we can see that the market has been making lower lows and lower highs. We’ve now hit that position, and we’ve rejected it. The price is now starting to turn to the downside.
A couple of different options we have with EUR/JPY on any shorting opportunity here. The target should be looking for the previous structure low, through here.
The strength and weakness suggest that the Euro is weak and that the JP Yen is strong. That’s why we should see a downtrend continuation on this pair. We also know that looking at EUR/USD, it’s at a resistance, resistance. We’ve got USD/JPY, which is also at a bit of resistance level and a bit of a range-bound market. If we see that EURweakness follow through, we should see EUR/JPY down at this level, here.
What we could look for is the four-hour timeframe to close like this. This would allow us to get shorter stop losses above the highs; or what you can do is to start looking at lower timeframes, and when we see the four-hour trends, we see a change in trend on a lower time frame.
When we see these: let’s say, this purple line is the four-hour trend. The market is pushing to the downside. We’re expecting the price to come back into this zone because the price has formed low, here, then high in that point. When the market breaks and forms a new lower low and we’re looking for trend opportunities, we’re expecting the price to pull back into these lows, into this zone, reject, and continue to the downside.
In these impulse moves on the four-hour timeframe, we’ll get downtrends and uptrends on retracements. So let’s say in this downtrend scenario, we’d get a downtrend on the 15-minute timeframe in the impulse phase. On the retracement phase, we’d get an uptrend on the 15-minute, and that’s what you see in regards to what we see here.
The market has been in a retracement phase. You can see that after breaking out of this range, the market has continued to trend to the upside. We’ve now come back into this area. The previous structure lows on the four-hour timeframe have consolidated, and it’s now breaking to the downside.
In theory, if this market is going to impulse lower, we should see a 15-minute downtrend out of this market until the price comes into another area where it’s deemed that it wants to be brought back up again, which could be this area, down here.
We’re trying to catch where the impulse is turning. And look at this 15-minute timeframe, now the price has broken through a consolidation, here, at 126.12. If the price comes back into this level and rejects it, then this could be a perfect opportunity to start looking for trend continuation moves on the EUR/JPY.
Keep an eye on EUR/JPY – it hits our key level. If the market comes back and retests this structure point, look for the potential short opportunities. The price may continue down first, and if it does, you can get another trend opportunity. Look at this level, here, where the market has found support and resistance in the past, around 125.88. Look for a break and retest of that level.
Thanks for watching, and I’ll speak to you very soon.
Apply what you learned from this Forex Chart Of The Day in your future trades EUR/JPY. The good news is you can test your trading strategy risk-free by signing up for a free Blueberry Markets demo account here.