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EURJPY Buying Opportunity Emerges, but 122.00 Is Key

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The EURJPY has given us a bullish pin bar following yesterday’s bounce from 121.20 support. I 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.

EURJPY 1-hour chart

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, I won’t entertain an entry until I 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.

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EURJPY confluence of resistance

Leave a Comment:

10 comments
Carol Capner says

Evening Justin.
I have just had a quick look at the EURJPY and feel it may now be bearish on the Daily and 240.
I will need to really check these levels tomorrow as right now it’s 11pm in UK.

Reply
    Justin Bennett says

    Hi Carol, the EURJPY never gave me what I needed to get long. I was waiting for a more rounded retest followed by bullish price action, which obviously didn’t happen.

    Reply
Marc says

Hi Justin. Again appreciate your work. I’m favouring the buy on this pair right now with the retest yesterday of the inverted head and shoulders on the daily starting Feb 8. Like the target of 124 and the confluence of fib for this retest.

Reply
    Justin Bennett says

    Marc, it did look favorable at the time but never quite set up for us.

    Reply
june says

Thank you for the post.

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Andre Steenekamp says

Hi Justin Is this not a head + shoulders starting July 2012.
Regards Andre

Reply
    Justin Bennett says

    Andre, not sure what you’re referring to.

    Reply
James says

What’s your stake on Eurjpy as the trend remains bearish

Reply
    Justin Bennett says

    James, I never entered EURJPY as things didn’t quite set up the way I wanted to see.

    Reply
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