EURJPY coming breakthrough/breakdown scenarios ideas (D)
Updated
The EURJPY looks to be trading in a triangle when taking a step back and viewing it from a strict outer trend line approach. Looking at a couple of inner intermediate trend lines we can see a slight favour to the upside. Note that we have only two-touches for all four trend lines, they have yet to be confirmed by the three-touch rule.
Looking purely at price action over this period there seems to be certain levels price moved in harmony with. Given the uniformity of the greater triangle trend, when we look through the kaleidoscope of a Pitchfan we start to see channels of support and resistance.
Price looks like it’s moving with purpose from one leg to another. Using Fibonacci Wedges starting at both the high of 2008 and the low of 2012 we can see how price has moved in a ballet-like manner, dancing inside the wedge zones and switching partners at the right time and place.
The Fibonacci Wedges shows us the curving movement, but we still have some price action left to capture. When Fibonacci retracements are applied we see the market often respects these levels. Currently we are trading between the 61.8 level and the Pitchfan median.
The market has made these patterns available to traders since the second trend line touches, since late 2014 for resistance and late 2016 for support. It’s possible we have a couple of opportunities if these patterns continue to hold. The overall greater trend looks like it could be favoring the short side as the convergence of the great trend lines intersect below the 0.5 Fib retracement. The supposed third-touch to resistance ended in a raised roof implying possible bullish exhaustion, however the intermediate trend lines suppose an ascending trend favoring the long side. Looking near-term the past couple of months the pair looks like it’s in a falling wedge which is a reversal chart pattern and if successful could rally the bulls. There may be a few opportunities at play:
Whatever direction the market takes we are looking for market determination at these zones of interest. We want to see price accelerating and making a clean break or clean bounce.
In any case, good luck out there and have fun.
Looking purely at price action over this period there seems to be certain levels price moved in harmony with. Given the uniformity of the greater triangle trend, when we look through the kaleidoscope of a Pitchfan we start to see channels of support and resistance.
Price looks like it’s moving with purpose from one leg to another. Using Fibonacci Wedges starting at both the high of 2008 and the low of 2012 we can see how price has moved in a ballet-like manner, dancing inside the wedge zones and switching partners at the right time and place.
The Fibonacci Wedges shows us the curving movement, but we still have some price action left to capture. When Fibonacci retracements are applied we see the market often respects these levels. Currently we are trading between the 61.8 level and the Pitchfan median.
The market has made these patterns available to traders since the second trend line touches, since late 2014 for resistance and late 2016 for support. It’s possible we have a couple of opportunities if these patterns continue to hold. The overall greater trend looks like it could be favoring the short side as the convergence of the great trend lines intersect below the 0.5 Fib retracement. The supposed third-touch to resistance ended in a raised roof implying possible bullish exhaustion, however the intermediate trend lines suppose an ascending trend favoring the long side. Looking near-term the past couple of months the pair looks like it’s in a falling wedge which is a reversal chart pattern and if successful could rally the bulls. There may be a few opportunities at play:
- After the market bounces off the Pitchfan median and breaks out over the 0.5 Fib retracement, it also breaks through the upper side of the falling wedge and bulls attempt to make another run for the 1.382 Fib Wedge wall and later the upper trend line (upper rectangles). If this were to happen it would break the patters we’ve seen thus far and if near term price action supports the move, we may be looking at the market getting ready for a breakout from the greater triangle to the upside.
- If the market is unsuccessful at rallying past the 0.5 Fib retracement, price breaks down through the Pitchfan median, and if what we’ve seen holds true then the we could view the 1.5 Fib Wedge as a possible target and support at the 38.2 Fib retracement past that. If the market breaks down through the Fib retracement we could be looking at a bear run to the 1.382 Fib Wedge and the lower trend line past that. The bears may have a tougher time breaking down as there’s a confluence of support protecting the downside.
- The third possibility is that price breaks down to the confluence of support where it bounces up through the next Fib Wedge.
Whatever direction the market takes we are looking for market determination at these zones of interest. We want to see price accelerating and making a clean break or clean bounce.
In any case, good luck out there and have fun.
Note
Spelling correction: we are currently trading at the 50 Fib retracement, not the 61.8 level as mentioned above.Note
Price looks like it's breaking out of the wedge to the upside and then consolidating.
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