Hi Traders! EURJPY critical zone provides buy opportunity for us. A detailed analysis of this potential bullish setup is as follows:
EURJPY D1 Chart:
On the daily chart the price is moving inside a channel. This channel is formed by the highs and lows reaching parallel resistance and support zones. The price is respecting these two zones so far and has currently reached the bottom of this channel. If we didn’t get a valid breakout here, we may then expect the price to respect the bottom of the channel and move higher again. We may now look for more evidences of bullish pressure on lower timeframes in order to join the bulls.
EURJPY H4 Chart:
On the H4 chart we have a critical zone that has formed based on the fibo levels of the cycles and the bottom of the daily channel. The price has currently reached this zone and is moving higher. In addition to this we also have a bullish divergence which we may consider as an evidence of bullish pressure. Until the critical zone holds, we may look for short term buys with more bullish evidences.
Invalidation: If the price moves lower and breaks below this critical zone then this buy setup will be invalidated.
Note: It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
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