Yesterday's 115.42 high was the beginning of a correction for EURJPY. I've drawn a corrective channel on the hourly chart below. Note that the uptrend line from Nov. 1st (in red) comes in at the top of the corrective channel so that strengthens resistance there. The price decline has also caused a drop below the RSI uptrend line. Still, even with this, I'd expect to see the pair rally and I'm still long from 112.00. 113.91 was this morning's low, one pip below the previous low of 113.92. I wouldn't be negative until I saw prices begin to dip into the low 112s and close. I don't believe that will happen today if at all.
Another test near 114 will probably cause me to add to my position but with a tight stop below 113.90.
Here's the hourly chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.