The EURJPY has given us a bullish pin bar following yesterday’s bounce from 121.20 support. We mentioned this area over the weekend as one to watch. More specifically, we were waiting for a pullback after last week’s 140 pip gain.
Here’s how the daily chart looks after yesterday’s rally.
On the surface, the pair seems ready to buy. The past 24 hours have no doubt favored the bulls, and the pair is sitting on critical support.
However, if we dig a little deeper, we can see that the 122.00 handle is a key factor here. Buyers need to break this area to sustain the bullish momentum.
A look at the 1-hour chart below shows the confluence of resistance at 122.00. It’s the March 10th low as well as two intraday highs from March 15th. Additionally, it’s the intersection of trend line resistance from March 13th as well as the 50% retracement from the March 13th high at 121.87 to yesterday’s low at 121.11.
All of these factors mean that if buyers intend to push prices higher, a close above this resistance area is needed. As such, we won’t entertain an entry until we see the pair climb above the 122.00 area followed by a retest as new support.
Those looking for a bit more conviction can wait for a 4-hour close above this region. Either way, a break of 122.00 would expose 122.87 followed by the current 2017 high at 123.70.
Note that there is also a trend line that extends from the December 2016 high that could give buyers problems on the way up. That level would come in near 122.40/50.
Check the upside technical analysis.
Performed by analytical expert: Urban Stamcar
Here’s how the daily chart looks after yesterday’s rally.
On the surface, the pair seems ready to buy. The past 24 hours have no doubt favored the bulls, and the pair is sitting on critical support.
However, if we dig a little deeper, we can see that the 122.00 handle is a key factor here. Buyers need to break this area to sustain the bullish momentum.
A look at the 1-hour chart below shows the confluence of resistance at 122.00. It’s the March 10th low as well as two intraday highs from March 15th. Additionally, it’s the intersection of trend line resistance from March 13th as well as the 50% retracement from the March 13th high at 121.87 to yesterday’s low at 121.11.
All of these factors mean that if buyers intend to push prices higher, a close above this resistance area is needed. As such, we won’t entertain an entry until we see the pair climb above the 122.00 area followed by a retest as new support.
Those looking for a bit more conviction can wait for a 4-hour close above this region. Either way, a break of 122.00 would expose 122.87 followed by the current 2017 high at 123.70.
Note that there is also a trend line that extends from the December 2016 high that could give buyers problems on the way up. That level would come in near 122.40/50.
Check the upside technical analysis.
Performed by analytical expert: Urban Stamcar