The EUR/JPY 4-hour chart presents a compelling bullish breakout setup following a structured downtrend. The market recently broke through a significant resistance zone, indicating potential further upside movement. This analysis outlines key price levels, market structure, and an actionable trading plan.
📊 Market Structure Overview
🔸 Downtrend Reversal: The price was previously trading within a descending channel (highlighted in green), forming lower highs and lower lows.
🔸 Support Confirmation: The price bounced from a strong support zone around 158.500 - 160.000, confirming buyers' interest in this region.
🔸 Breakout & Retest: A strong bullish impulse broke through the 164.500 - 165.000 resistance zone, suggesting a shift in market sentiment.
📌 Key Trading Levels
🔹 Support Zone: 158.500 - 160.000
This area previously acted as a demand zone where buyers aggressively pushed the price higher.
It now serves as a safety net for long positions.
🔹 Resistance Zone (Now Potential Support): 164.500 - 165.000
Price has broken above this level, but a retest could provide an ideal entry for confirmation.
🔹 Next Major Resistance (Target Levels):
TP1: 165.000 → A psychological level and previous resistance.
TP2: 166.020 → A higher resistance zone where price may struggle to break through.
📈 Trading Plan – Long Setup
✅ Entry Confirmation:
Wait for price to pull back to the 164.500 - 165.000 zone.
Look for bullish candlestick patterns (e.g., pin bars, engulfing candles) to confirm buyers stepping in.
🎯 Take Profit Targets:
TP1: 165.000 (Initial resistance level)
TP2: 166.020 (Potential extended bullish move)
🛑 Stop Loss Strategy:
Below 160.038 (Previous structure low & key support level)
Ensures protection against potential fakeouts or trend reversals.
📢 Risk-Reward Ratio:
Aiming for 2:1 or better risk-reward ratio for an optimal trade setup.
📝 Market Outlook & Conclusion
📌 The recent breakout above resistance suggests bullish momentum is strong. However, traders should be patient and wait for a pullback to enter at a better risk-reward level. If price successfully retests and holds above 164.500, there is a high probability of continuation towards 166.020.
🚀 Trading Bias: Bullish – Until market structure shifts or a major rejection occurs at resistance.
📢 Final Trading Tip
🔹 Patience is key! Don’t rush into a trade immediately after a breakout. Wait for confirmation, as false breakouts are common in volatile markets. A successful retest of the broken resistance will provide a low-risk, high-reward entry opportunity.
📊 Market Structure Overview
🔸 Downtrend Reversal: The price was previously trading within a descending channel (highlighted in green), forming lower highs and lower lows.
🔸 Support Confirmation: The price bounced from a strong support zone around 158.500 - 160.000, confirming buyers' interest in this region.
🔸 Breakout & Retest: A strong bullish impulse broke through the 164.500 - 165.000 resistance zone, suggesting a shift in market sentiment.
📌 Key Trading Levels
🔹 Support Zone: 158.500 - 160.000
This area previously acted as a demand zone where buyers aggressively pushed the price higher.
It now serves as a safety net for long positions.
🔹 Resistance Zone (Now Potential Support): 164.500 - 165.000
Price has broken above this level, but a retest could provide an ideal entry for confirmation.
🔹 Next Major Resistance (Target Levels):
TP1: 165.000 → A psychological level and previous resistance.
TP2: 166.020 → A higher resistance zone where price may struggle to break through.
📈 Trading Plan – Long Setup
✅ Entry Confirmation:
Wait for price to pull back to the 164.500 - 165.000 zone.
Look for bullish candlestick patterns (e.g., pin bars, engulfing candles) to confirm buyers stepping in.
🎯 Take Profit Targets:
TP1: 165.000 (Initial resistance level)
TP2: 166.020 (Potential extended bullish move)
🛑 Stop Loss Strategy:
Below 160.038 (Previous structure low & key support level)
Ensures protection against potential fakeouts or trend reversals.
📢 Risk-Reward Ratio:
Aiming for 2:1 or better risk-reward ratio for an optimal trade setup.
📝 Market Outlook & Conclusion
📌 The recent breakout above resistance suggests bullish momentum is strong. However, traders should be patient and wait for a pullback to enter at a better risk-reward level. If price successfully retests and holds above 164.500, there is a high probability of continuation towards 166.020.
🚀 Trading Bias: Bullish – Until market structure shifts or a major rejection occurs at resistance.
📢 Final Trading Tip
🔹 Patience is key! Don’t rush into a trade immediately after a breakout. Wait for confirmation, as false breakouts are common in volatile markets. A successful retest of the broken resistance will provide a low-risk, high-reward entry opportunity.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.