Over the past several years, EURJPY
has been confined to a limited, contracting range that is wrought with impulse waves and sideways corrections. The current trend is no exception, forming two flags at points of structure drawn out from extended trend lines
, thus suggesting a third bullish
move may be in order. OBV and A/D indicators affirm the strength of the prevailing trend, so I have no reason to expect that the current flag is a slowing of momentum in response to a reversal in sentiment. Two profit targets are easily identifiable on the chart: the . 618 retracement
of the 3-year range (or most recent highest high, lowest low) and the upper boundary of the contracting wedge
that has taken form over the past 5 years. The former is, of course, the more conservative, and should thus be used as an opportunity to reduce position size before sights are set on TP2.