EURJPY trading a rejection with a favorable RR ratio
EURJPY action is very well represented by this ascending triangle on the 4 hour chart.
The price has tested the lower part of the triangle several times in the past days and this gave us the opportunity to study the reaction on it.
To be honest, reaction has not been the best one. You can see that there is a first reaction between the 3rd and the 6th of January, with 2 good lower shadows and a good acceleration by buyers, that stops around 121.50 anyway, before getting back to the uptrend line of the triangle.
I consider this reaction as a good one, but not good enough to push the price back to the upper part of the trianle, in area 122-122.50.
We are now having another reaction by buyers, with a good lower shadow right on the uptrend line, followed by a good green candle, although I would have preferred a bigger candle, forming a bullish engulfing pattern.
I recognize that there is a reaction by buyers, but doesn't seem to be very strong. So the question is: "is it strong enough to push the price towards 122.50?".
Buyers' not-so-strong reaction is the only doubt in this trade, though.
Setup of moving averages is in favor, there's a clear chart pattern that shows recent market action, it seems that the area around 119.80-120.40 is also a good area of support, risk to reward ratio is 1:3.24.
We can't really ask for more, so I decided to enter this trade.
The price has tested the lower part of the triangle several times in the past days and this gave us the opportunity to study the reaction on it.
To be honest, reaction has not been the best one. You can see that there is a first reaction between the 3rd and the 6th of January, with 2 good lower shadows and a good acceleration by buyers, that stops around 121.50 anyway, before getting back to the uptrend line of the triangle.
I consider this reaction as a good one, but not good enough to push the price back to the upper part of the trianle, in area 122-122.50.
We are now having another reaction by buyers, with a good lower shadow right on the uptrend line, followed by a good green candle, although I would have preferred a bigger candle, forming a bullish engulfing pattern.
I recognize that there is a reaction by buyers, but doesn't seem to be very strong. So the question is: "is it strong enough to push the price towards 122.50?".
Buyers' not-so-strong reaction is the only doubt in this trade, though.
Setup of moving averages is in favor, there's a clear chart pattern that shows recent market action, it seems that the area around 119.80-120.40 is also a good area of support, risk to reward ratio is 1:3.24.
We can't really ask for more, so I decided to enter this trade.
Trade closed: target reached:
Take profit reached.
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