Yesterday I posted the 15-minute chart of EURJPY and it did indeed break out to the long side as expected. I added another position yesterday afternoon at 112.70 in additon to the existing long position at 112.18. In breaking from the triangle, it managed to cut through the resistance zone that was holding it below 112.92 and has reached a high of 114.01 just a few minutes ago.
With the break above the long downtrend line on the weekly chart that I blogged about yesterday, it wouldn't be unreasonable to expect we're in some sort of larger correction and the top of a range that goes back to September 2009 at 115.69 is in sight. After that 116.48 is the .382 retracement of the move down from 170.01. Above that are highs in the 128 and 138/139 area.
However, nothing moves in a straight line. The pair has exceeded the target for the triangle at 113.50; it's overbought on 15-minute and one-hour charts. There's also a rounding on the top of the 15-minute chart that hints at traders taking profits. So it wouldn't be unreasonable to see some sort of pullback.
If the pair begins to break down, support is at 113.50, 112.92, 111.83, 111.25, 110.32, and 109.59/52 (price low and fib). Below that would hint at 106.83 and of course below 105.43 would resume the larger downtrend. I will probably add to my positions on a pullback.
Here's the 15-minute 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.