Week 02 Recap: “Price failed to close below this key support level on three attempts in the past week…” My oh my, and what happened after that? Gong Xi Fa Cai to the bulls!
a) Tflow® bulls who finally got in their trades on H1 received a 205-pip Ang Pow upon reaching the 4th Predicted Target.
On the Daily chart, EURJPY rejected the decade-old horizontal support (Yellow horizontal line) and raced towards the high of 2012 (Maroon horizontal line). Having closed above the low of December, are we about to see happier days for the EURJPY? Yet the uncertainty in the European economy continues to weigh down on price, as evident by the red candle on Friday Week 03. With price failing to create a new high for 2012, is this LH in the making? Or is this a temporary resistance for the bulls to take a breather before coming back stronger towards the end of January?
EURJPY Daily Chart - Price Found Support at a Horizontal Level Last Seen in 1999
Going down to the H4 chart, price swiftly closed above the low of Week 02 (Yellow horizontal line), and created a bear trap. Price rallied past the high of Week 02 (Aqua horizontal line) to find resistance at the high of Week 01 (Maroon horizontal line). With the upward move in the past week, we can put in place an upward blue ED channel. For a reversal pattern to form, price will need to make a HL in the coming week.
EURJPY H4 Chart – Price Closed Positively in Week 3 After the Formation of a Bear Trap
Going into Week 04, here is what we can look forward to:
a) Bulls (Blue arrow) will find support at the low of Week 52 (Green horizontal line) to continue its run towards the confluence of the upper border of the ED channel and high of Week 01 (Maroon horizontal line). Thereafter price can look to the low of Week 50.
b) Bears (Red arrow) will return to bring price down to the high of Week 02 (Aqua horizontal line) and then the lower border of the blue ED channel.
And the Doctor’s Advice for the Week: The overall trend for the EURJPY is still down. Any upward move could merely be a retracement. Caution.
