EURJPY—hammer on hourly

The remainder of my long from 112 profit-stopped out for +50 pips during the correction that began last Friday morning. The correction brought price down to a low of 111.72 as of this morning where price formed a hammer on the hourly chart. This retraced all of last week's upward move and it also meant price dipped back into the daily corrective channel or bull flag. While mindful of behavior around the red channel line on the chart below, I'm looking to enter a long near here since the stop can be tight and I'd expect to see a move up to 114. However, should price continue dropping and close below 111.50, it signals further moves down are likely. A stop and reverse would be the way to go.

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.

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