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EURJPY Future Direction Hinges on 121.00

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I discussed the EURJPY in Saturday’s Forex forecast video.

The key takeaway from that analysis was the ascending channel that extends from the 2019 low that developed last September.

It’s the same channel I pointed out on January 6th.

Here’s the EURJPY segment of Saturday’s video:

Notice how the EURJPY struggled at the 122.60 resistance area this week.

However, the future direction for the risk-sensitive pair hinges on what lies just below today’s price.

At the moment, ascending channel support comes in near the 121.00 handle.

Why is that significant?

It’s significant because the ascending channel below (second chart) has directed the short-term uptrend that began last September.

The broader trend for EURJPY is also still pointed lower.

That’s evident by the descending channel since the February 2018 high.

Here’s a view from the weekly time frame:

EURJPY descending channel on the weekly time frame

Given the combination of the smaller ascending channel within the longer-term downtrend, an eventual break lower does seem likely.

Of course, we can’t rule out the bullish scenario entirely, especially while the EURJPY is above ascending channel support on a daily closing basis.

The “daily closing basis” refers to the 5 pm EST close when using New York close Forex charts. These charts give you five 24-hour sessions each week.

Get instant access to the same charts I use to trade price action.

But just like I mentioned in yesterday’s CADJPY video, I’m only interested in shorts given the longer-term downtrend here.

A close below channel support near 121.00 would expose 119.20 and perhaps the 2019 low at 116.20.

Alternatively, a push higher would likely encounter resistance in the 122.60 area, followed by the descending channel top near 123.80.

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EURJPY ascending channel within a larger descending channel

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6 comments
Justin Bennett says

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Praise says

well noted….thanks a lot.

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    Justin Bennett says

    You’re very welcome.

    Reply
Paul says

Hi Justin, I also see a support which is now resistance on the weekly chart, starting in 2012 and another low in 2016 and then it broke in july last year. Would you agree on that? Thanks

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    Justin Bennett says

    Perhaps, it doesn’t line up the way I’d like to see, though.

    Reply
Mohammed Sazzad Hossain says

Thanks.

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