EURJPY – Bullish Signs Developing?
Is the EURJPY starting to form a reversal?
Taking a look at the daily EURJPY chart below, let’s look at some of the bullish price signs starting to develop. Price set into a medium-term downtrend with one continuation that confirmed the trend break. The picture changed on the 19th as bulls made a solid statement posting an engulfing bar that broke out of the downtrend. With two more days of buying, sellers regained control pushing price back down to 119.89.
This low set up what’s currently a HL and a confirmation that the previous downtrend could be broken. Moving forward on the bull side we would like to see the low hold with price not closing below it. If buyers can do this the next test will be resistance seen at 121.00. A break and close above this level starts to suggest that buyers are back in control and a new short to medium uptrend is underway.
If sellers can close below the last low (cancel point) momentum could still remain in sellers favour and a new test into the engulfing candle could be seen. For now, it’s up to buyers to prove they hold momentum with a defence of 120.05 / move back to test resistance.