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EURJPY Tests Key Resistance at 125.50

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Like other yen pairs, EURJPY has been consolidating since the January 3rd flash crash.

You may recall the short setup that materialized in mid-December. The 200-pip target was reached in a hurry and was part of a substantial 900-pip drop.

Given the price action since January 4th, it seems EURJPY may be gearing up for the next leg lower.

Just yesterday the pair hit a key resistance level at 125.50. The region served as support between May and December of last year.

On the flip side, we have diagonal support that extends from the January 4th low.

It isn’t as defined as 125.50 resistance. However, lows like the one that formed on the 4th tend to act as key areas going forward.

If we use that low to connect a trend line with the January 25th low, we get a wedge pattern that could become a factor shortly.

For this to work, we first need a daily close below support near 124.20/30.

Remember that I use New York close charts that close at 5 pm EST.

Go here to get instant access to the same charts I use.

Keep in mind that the 124.20/30 support area could change depending on how long it takes EURJPY to test the area.

But as long as the pair remains below 125.50 on a daily closing basis, EURJPY is vulnerable.

Key support below 124.20/30 comes in at 122.70 followed by 119.30.

Alternatively, a close above 125.50 would expose 127.60.

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EURJPY wedge pattern on daily time frame

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7 comments
Dee says

On point

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Morwadi From Botswana says

nothing will ever beat price action analyzing in the market,

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Khotso says

I saw this ascending triangle on the 4hr frame…nd was ready to go long then rememberd ascending triangles ar most reliable whn the trend is bullish and eurjpy is clearly bearish…so as soon as it hit my resistance kept on selling

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Iroga nyangi says

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Fred says

Justin, how does EUR/JPY compare to the EUR/USD? When looking at the ascending wedge on EUR/JPY does the upward bias of the EUR come into play since the pairs are correlated?

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Xolani says

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