EURJPY Multi Time Frame critial areas- 2 possible opportunities
Yellow zones- critical zones based on the monthly time frame
Red zones- critical zones based on the daily time frame
Blue zones – critical zones based on the 4h time frame
In the bigger picture both EUR and JPY are with a big amount of “long” COT contracts. Both are at record highs right now, especially the EUR. As I said last week- strong pressure from the “short” contract size may kick anytime soon and it already has.
In the beginning of June price successfully broke the 124.000 area, but could not manage to make a good close above it and to continue the strong momentum, so the price when down towards the 0,5 Fibonacci retracement level where strong buying pressure came in. The 0.382 Fibonacci level was seen as support, but we must be careful with the 0.236 as well, because it may be a good pressure point sell/buy volatility.
There are 2 possible scenarios:
1. Since the 0.5 Fibonacci support the price has gone slightly up and it is in a closed triangle structure for 3 weeks now. For a month now a wide-angle formation is respected multiple times, which can be an indicator for a false breakout towards the 124.000 or the 125.000 monthly critical. If the price respects the wide-angle formation and goes towards the monthly critical a strong rejection-confirmation will be needed in order to enter the opposite trend. If that happens a move to the 116 area is a high possibility.
2. If the price doesn’t respect the wide-angle formation or makes multiple tops near the 0.236 Fibonacci level (which is also a strong resistance point) and breaks the closed triangle- a move towards the 119.5- 4h support zone is a must. There we must see how the price reacts in order to determine its next moves.
Happy Trading!
Red zones- critical zones based on the daily time frame
Blue zones – critical zones based on the 4h time frame
In the bigger picture both EUR and JPY are with a big amount of “long” COT contracts. Both are at record highs right now, especially the EUR. As I said last week- strong pressure from the “short” contract size may kick anytime soon and it already has.
In the beginning of June price successfully broke the 124.000 area, but could not manage to make a good close above it and to continue the strong momentum, so the price when down towards the 0,5 Fibonacci retracement level where strong buying pressure came in. The 0.382 Fibonacci level was seen as support, but we must be careful with the 0.236 as well, because it may be a good pressure point sell/buy volatility.
There are 2 possible scenarios:
1. Since the 0.5 Fibonacci support the price has gone slightly up and it is in a closed triangle structure for 3 weeks now. For a month now a wide-angle formation is respected multiple times, which can be an indicator for a false breakout towards the 124.000 or the 125.000 monthly critical. If the price respects the wide-angle formation and goes towards the monthly critical a strong rejection-confirmation will be needed in order to enter the opposite trend. If that happens a move to the 116 area is a high possibility.
2. If the price doesn’t respect the wide-angle formation or makes multiple tops near the 0.236 Fibonacci level (which is also a strong resistance point) and breaks the closed triangle- a move towards the 119.5- 4h support zone is a must. There we must see how the price reacts in order to determine its next moves.
Happy Trading!