Daily Price Action
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EURJPY Bulls Lose Key Handle as “Risk Rally” Unwinds

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On January 23 I made a bold call. I wrote that the EURJPY had likely carved a multi-year top at 136.60. The idea was based on a simple Fibonacci study and the rising wedge pattern that began last August.

Fast forward to today and it appears I was off, but only by 90 pips. While I wouldn’t say the trend has turned bearish just yet, Thursday’s close did break wedge support at 134.00. It’s a significant development and one that signals lower prices are ahead.

The question now is whether or not the pair will retest 134.00 area as new resistance.

Of course, I have no way of knowing the answer. It could go either way. On the one hand, the EURJPY is getting a bit overextended on the daily time frame, so some consolidation at current levels wouldn’t surprise me.

However, if we are now in a risk-off environment as global risk assets would suggest, the concept of mean reversion may take a back seat for a while.

Regardless of whether the pair rotates higher to retest 134.00 first or immediately plummets to 131.40, yesterday’s breakdown is significant. At a minimum, I believe it could result in a 500 pip decline to the August 2017 lows near 128.30. That’s the inception point of this rising wedge.

But before we see a 128.30 print, sellers need to get through the 131.40 support level. The area served as resistance throughout August of last year and later flipped to support between October and November.

It’s going to take a daily close (New York 5 pm EST) back above 134.40 to negate my bearish outlook for the EURJPY. As long as it holds as resistance on a daily closing basis, we will likely see much lower prices in the days and weeks ahead.

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EURJPY break below rising wedge support

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20 comments
Nini says

Thank you

Reply
Justin Bennett says

Full disclosure: I’m already short from just above 136.60 (as mentioned in the member’s area) and will be interested in adding to my position.

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    André Sevilla says

    Hey Justin, i just want to know what did you see to enter short on that position??
    Thanks in advance!

    Reply
    Bob says

    I’m new to trading.. But sir, does this mean that now it’s the best time to place in a buy ?

    Reply
      david ampofo says

      everyone have to know these is very fast trade and good ideas.

      Reply
taiwo says

nice analysis i also see it coming

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Sepia says

Thank you Justin Bennet…

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Aly says

Hello ,, Is there a member forum available ? Coz i want to register for it if possible ,, and are you telling your trades over there ? Thank you

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UHAYMANHNINTHU says

Thank you. ေက်းဇူးပါ။

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Daryl Lassiter says

Hey Justin, do Daily Timeframes create ( Head and Shoulder / Doublt ops like other time frames,if so do we wait until the formation is complete?

Reply
    Justin Bennett says

    Sure.

    Reply
Suhadi says

Tq mr JB..note

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Moses says

But Justin is it better to wait for a retest, or can I go ahead and place my sell order?
Secondly, what’s the probable stop loss and take profit targets?

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Talha says

Any Entry point?

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Howard says

may be range-bound for a while between 133 & 134

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Veronica says

Thank you Justin

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david ampofo says

PLEASE,BE CAREFUL ABOUT RATE AND TAX YES MAKE IT A VERY SIMPLE RATE FOR COUSTOMAS.

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Arsalan says

Hello Sir,
It is pleasure to commenting to you sir i am very excited, i have become a bigger fan of yours

Reply
arsalan says

Sir,
Can you plz tell us about Gold Set up, Kindly it is a request thanks

Reply
Qair Khan says

Since i follow your analysis (Justin Bennett) falling in love day by day, Appreciated!

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