With the North Korean rhetoric pushing capital into the safe havens such as CHF and JPY a need for a cool head is needed. Money has been made be on the risk-off environment, however this will not last and the current movement should be seen as a shorter term pullback in the midst of bigger trending moves. In this context, let's examine EURJPY on multiple time frames.
Monthly
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This is a monthly heiken ashi chart.
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The current candle is blue.
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This indicates a long term monthly uptrend is underway.
Weekly
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This is a weekly candlestick chart.
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There is a higher trough followed by a higher peak.
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Therefore there is a weekly uptrend in force.
4 Hour
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This is a 4H candlestick chart.
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EURJPY has pulled back into a strong resistance turned support area (blue rectangle).
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This area has acted as support (green arrows) and resistance (red arrows) multiple times.
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It is certainly a level that the market has been taking notice of.
Conclusion
- Look for a change from a risk-off to a risk-on environment.
- When this happens we should see a bounce off current support levels as bulls take advantage of value.
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