Hi Traders! EURJPY forecast follow up and update is here. On January 12th I shared this “EURJPY Forecast And Technical Analysis” post in my blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club. Spoiler alert – free memberships are available!
My Idea:
On the H1 chart, we could see that the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows we may consider this as another evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Also, we have a strong support zone that has formed and the price which is moving lower has broken below this zone and is holding below it. Currently, this strong support zone is acting as a strong resistance zone for us. Until this strong resistance zone holds my view remains bearish here and I expect the price to continue lower further.
EURJPY H1(1 Hour) Chart Current Scenario
On the H1 chart, after the bearish trend pattern, I was expecting the price to move lower further until the strong resistance zone holds. Generally, after a bearish trend pattern, we may expect correction and then further continuation lower. We had a flat correction here in the form of a range. The price then broke below the bottom of this range and then we had a pullback with the price retesting this breakout. This pullback happened in the form of an ABCD pattern, then the price moved lower, and broke below the most recent uptrend line. We may consider these as facts provided by the market supporting the bearish view and also there were no opposite signs. The price then moved lower further exactly as I expected and has delivered around 150 pips move until it was blocked by a bullish divergence.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. The facts were supporting the bearish view here and there were no signs against it. When the facts do happen as we expected you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us at majority of the times and it’s our obligation as traders to be able to listen to these things that the market tells us and we should try to make the right actions.
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To your success,
Vladimir Ribakov
Certified Financial Technician
