Week 34 EURJPY Review: New Low for 2010… With Regret?
The weakness of our beloved EURJPY was evident for all to see in early Week 34. Its fall on Monday and Tuesday signalled yet another new low for 2010. We have had a few of them in the past four months! We have also repeatedly reminded ourselves to be careful of the momentum of the downtrend over the past 2 weeks.
On the Daily chart, after the new low of 2010 was reached, price immediately retraced above the previous 2010 low (June 2010 Low = Green horizontal line). There certainly was a sentiment of Regret. So much so that price went as high as to test the next resistance, which was the May low (White horizontal line). Could this now be a case of support turns resistance?
Chart Daily- EURJPY New 2010 Low
Going down to the H4 chart, price broke out of a downward equidistant (ED) channel (Blue channel) on Friday Week 34. Support was found on the Green Horizontal line with price rising to close just below the next resistance. As such, a new upward ED channel (Purple Channel) has formed. Will this channel be obeyed?
Chart H4- EURJPY New upward ED channel?
Going into Week 35, here is what we can look forward to:
a) Bears (Red arrow) will be rubbing their paws with glee as our beloved EURJPY has parked itself at a price resisted by the White horizontal line and upper border of the purple ED channel. Bears will bring the price down to the lower border of the purple ED channel and when successful, retest the low of June 2010 (Green horizontal line)
b) Bulls will continue its momentum up (Blue arrow) the blue ED channel, should it succeed in overcoming the immediate resistance (White horizontal line). The next potential resistance is yet another support turns resistance (Yellow horizontal line).
And the Doctor’s Advice for the Week: Remember to map out your crucial Support and Resistance levels before going down to the lower time-frames!
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