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EUR/JPY Rallies after Throwback - Told Ya So!

I should not toot my horns too loud yet because EUR/JPY still needs to break above this week's highs around 141 to make this a great trade. But it is already a good trade where I can at least break even and maybe lock in some profit in case the market suddenly falls.


Recall the breakout noted in the previous EUR/JPY post. I have been following the breakout on top of a bullish market as a sign to add or initiate longs. Some levels and conditions I noted were:

1) price around 139.50, middle of previous consolidation range, or apex of previous triangle.

2) Stochastic around previous lows, which were just above 20. 

3) If you have been following my posts, you also see I like the S20-R40 combination (R40 being RSI around 40).

(EUR/JPY 4H Chart: click to enlarge)

These all came to head, and although the market break through 139.50, it was supported at 139.11, and respected the projected triangle support. 

The bounce is a good indication that bulls are still in charge, though a break above 141.05 will be needed to confirm this. In the intra-session, the current swing may cause some near-term overbought conditions, and you might get some retracement before heading toward 141. 

Above 141.05, the next challenge should be around the 142-142.50 highs from January before opening up to the 145-145.60 highs at the turn of the year.