Good morning traders,
If you’ve been following the Vantage FX blog, you’ll have been following the bullish price action in EUR/JPY. The bullish trend line was broken, but as we see so often across the forex markets, price was simply just dipping down to clean out weak traders wanting to play counter-trend, before changing direction back in the direction of the original trend.
On the daily chart below, you can see that after breaking down through the trend line, price hasn’t been able to make a lower low and has in fact stalled at the previous resistance turned support level that we have been speaking about:
Click the link in the paragraph above and take a look at our thoughts on the level as far back as September when it first broke though the trend line and looked like forming horizontal support.
With trend lines being relatively subjective, when these horizontal levels form, they are perfect to manage risk around. Added significance can also be given to the level if it’s on a higher time frame, such as the daily chart that we’ve highlighted it on above.
Have you been following this EUR/JPY setup and trading from the long side? Let us know by mentioning @VantageFX on Twitter and sharing a chart or two of your setup.
Best of probabilities to you!
Dane Williams – Vantage FX
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Source: Vantage FX Blog