EURJPY one step from a major buy signal

Today, we do have a nice setup on the EURJPY. As for now, we cannot tell You if the price will go up or down but we are one step from the great finale and according to the technical analysis, we are very close to see a major trading signal. So in other words, there is a interesting situation but for the trading signal we still have to wait a bit. As always on the market, at the end of the day, patient traders will be rewarded.

EURJPY

EURJPY, on Friday, created a nice bullish candle, which shows us that demand came back to the market. Local upswing, stopped on a very important resistance and we are currently waiting for a breakout or a bounce, which should trigger us a proper trading signal. In the long-term, the price is in the bearish flag (red lines), which is correcting the main up trend. That formation, promotes us a further upswing. For this, we need to see the breakout of the 38,2% Fibonacci first. This retracement is in the same place as the horizontal resistance taken from the support from March and May -129.4. Breakout of that area will give us a legitimate buy signal and that is the positive scenario. On the other hand, a bounce here, leading to a further drop and a breakout of the blue up trendline, will deny the positive sentiment and should open us a way towards new lows.

 

If I had to bet right now, I would go for an upswing but as a price action trader, I need to see the breakout first. EURJPY closing a day above the yellow area will be a signal to go long.

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