Branching into FOREX:EUR/JPY Long

FX:EURJPY   Euro / Japanese Yen
Hey everybody, very excited to see crypto markets finally showing signs of a bottom coupled with steady, good fundamental news coming out recently. I took a step back from trading the past year as I'm new to trading and didn't feel comfortable engaging in my first real bear market. During that time I asked myself whether or not I could realistically integrate trading into my life and if so, what my goals are and what do I need to do to reach them. Part of my plan was to expand my domain to FOREX markets and to implement my new strategies in a demo account. The whole experience so far has been educational and very enjoyable. Here is an idea I have about the EUR/JPY pair.

Purple horizontal line is 1M fib retracement; gold and silver horizontal lines are 1W fib retracements

EUR fell hard to JPY the past few days but finished Friday with a pin bar at near-term support. Considering the pin bar appeared in an area that does not necessarily show that the support is strong, I do not think the pin alone is a good signal for a potential trade setup. However, looking back at January 3rd just as the market was pushing a new low, a giant pin bar was posted. This is more pronounced if viewed from the 1M time frame as January also formed a pin bar . Unlike the more recent pin, the ones posted in January were formed around multiple fib retracements.

Looking at indicators on the 1D we remain above the cloud which suggests short-term up-trend. The conversion line of the ichimoku cloud is approaching the base line, also seen on MACD with an actual cross, which suggests potential for an entry point. RSI remains above 40 confirming bullish momentum is still in play but weak. In a position like this I think a limit would be best set around our previous high at 127.3 while leaving some open for the next leg up. For perspective we are narrowing in a broader triangle pattern that can be seen on the 1M chart. For reasons I have laid out I think there is more momentum for the bulls, but I also believe this comes at high risk. Alternatively waiting to see if prices retest nearby support at fib lines could provide a better, less risky opportunity.

EUR in general has been hit hard recently in the EUR/USD and EUR/GBP markets, recording sharp drops around major lines of support. However, in both markets we can see bullish divergence with the MACD and RSI . It is also worth noting that neither the U.S. or G.B. are sound economically as we see major U.S. indices faltering and have no clear idea of how Brexit will play out; I believe the recent sharp moves may be the result of speculation and not necessarily a sign of EUR weakness, especially relative to USD and GBP. Looking at EUR/CHF we see a similar situation to EUR/JPY , that is evidence that a bottom may be forming. Considering JPY and CHF are often considered stable currencies, especially compared to USD and GBP, I think it suggests bullish momentum that EUR is trading higher and showing bullish divergence in respective markets.

Would love to hear any ideas or comments. Have a good weekend.


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