FX:EURJPY   Euro / Japanese Yen
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1st: Price touched strong resistance, resistance has been valid from 2008 showing strength in the level. Also, price rejecting level shows major sell orders (institutional order flow) in this area which should increase validation in the confluence.

2nd: Bearish engulfing pattern at the resistance level , not the best bearish engulfing pattern. But still valid as the previous candle was engulfed.

3rd: Bollinger band which is near there massive/strong resistance area , and also, clearly shows price action piercing the oversold area which validates the confluence.

Conclusion: Price action being around a strong level that has been validated from since 2008, rejecting the zone from the Friday close. And also forming a bearish engulfing pattern at and around the resistance level , as stated before not the best bearish engulfing pattern(reversal) but the reason why the validation is still taken into account is solely because of the strong level. Usdjpy which is a positively correlated pair has hit a reversal, but this pair had more confluences which equals more validation.
Good analysis
+1 Reply
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