EUR/JPY Price Analysis: Bears seeking an extension to channel support
- EUR/JPY bears lining up for an opportunity to test channel support.
- EUR/JPY otherwise trapped between daily support and resistance.
As per the start of the week's analysis, EUR/JPY Price Analysis: Bears seek break of daily support, bulls anticipate monthly higher-high, the cross is consolidated between support and resistance still.
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However, there could be an opportunity for traders within the channel and the 1-hour time frame is offering prospects of a downside continuation as follows:
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However, while there is clearly a bearish bias, there is plenty of structure on the lower time frames that should be considered, such as the 15-min and potentially further upside left in the correction:
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In the above chart, the point of control, (POC) for the current session, is critical and may serve as a support, guarding the downside target. Therefore, bears may wish to approach such a set up at reduced risk.
However, a break of current support, for which has already happened, was enough to offer an opportunity.
A sell limit can be placed at the old support structure, 126.10, which would be expected to act as resistance on a bullish retest.
A stop-loss above the highs, 126.22, offers protection from a rally through low volume nodes into the 126.30s for a 1:2 risk to reward position.
Update: Breakeven
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The position is now risk-free with a close below new resistance structure and even the POC.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
