After a strong bullish run on EURJPY, we anticipate a pullback, at which point, we will take a long trade, continuing the trend. The price for our buys would be at 130.90. Currently, market is at 131.75. Hence, the pullback is around 80 pips below the current market.

The market has formed an ascending trendline, which is still far away from the price action. EURJPY may only retest this trendline, to continue going up. The resistance trendline has formed a bearish divergence on the price action. We won’t be taking any shorts given the trend is still bullish. We will wait for the triggering of this resistance trendline.

The 75-78.6% retracement level is in confluence with the support level. The H4 time frame has the same support level as the retracement. This confluence would be strong for the continuation of the bullish momentum.

Both the EMA 50 and 200 are in a bullish region, with a bullish death cross. Earlier, market broke up the EMA 50 and has not retested it yet. EMA 200 is far below the current prices. At the support level, we might witness the retest of the EMA 50. This retest will add to a third confirmation.

Both the oscillators are in an over extended bullish region. RSI is at 68 and CCI is at 140 respectively. Right now, a bearish divergence is formed. We will wait for this bearish divergence to be absorbed and then we will take the position at the support level.

Although the shorts seem very lucrative, it should be kept in mind that EURJPY is still not on a high timeframe resistance level. Therefore, taking a short from a lower time frame, in a bullish momentum can be hazardous. We will wait for the trend trade at the support level, mentioned on the chart.

Waiting for bullish retracement on EURJPY

Oct 14 2021

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