It’s been nearly four weeks since I first mentioned the 131.80 area on the EURJPY. The level dates back to 2003 and became a foothold for buyers last month.
I’ve also covered the pair several times in recent weekly forecasts. That commentary has focused on the idea that the late October selloff created a potential double top reversal.
However, despite their best efforts, sellers have been unable to close the price below 131.82 on a daily closing basis. The lack of follow-through has left us on the sideline.
But something tells me EURJPY bears are close to confirming the 260 pip topping pattern. The recent lower high on November 2 is promising, yet we still need confirmation before further consideration is warranted.
So, just like in October, without a daily close at 5 pm EST below 131.82, there is no short setup. I wanted to clarify this because I’ve been asked several times if I’m in the trade.
I am not. I’ve merely been watching and waiting for a daily close below 131.82. Once that occurs, I will keep an eye out for a retest of the area as new resistance.
I know some traders were lured in by those intraday breaks below key support. For the rest of us, this is just a waiting game.
There’s no need to rush things because a breakdown would target the 129.30 area, a substantial 240 pips below the current price. Any setup where the potential reward is at least three times the risk is worth waiting for.
Get Free Forex Trade Setups Delivered To Your Inbox! Click Here To Get Alerts