In the early morning Asian session saw risk on in the form of EUR/JPY breaking through some recent highs on its way to a high of 128.34. This was on the back of some optimistic comments from the US President and the prospect of Bernanke being re-appointed. One hour later with reports that China was again taking measures to reign in excessive lending and slowly pop the growing property bubble; this saw EUR/JPY plunge 126.20 in double quick time.
The fall was within the descending channel A-A1 and B-B1( refer to the second chart of 5MTF). Along the way a flag pattern was identified.
After lunch, EURJPY was consolidating with both lags glued to the bottom and BB Macd moving within the two narrow channels. At this time a possibility of triangle pattern forming.
About 20 minutes to 7:00(6:00 GMT) I referred my decision on the 1 MTF char (the first chart above).. At 6:50 entered with a buy on blue lag approaching the 15 level. Since EURJPY is at consolidation phase I am looking for a less 20 pips profit. Exited at point 1 when 60 EMA acted as a resistance. for a 10 pips profit. At point 1, decided to fade the round number of 126.50 with a sell entry. The fade was taken on the position of the blue lag is at the top waiting to cross over the 85 level.
Exited the position at Point 2 with support at mid level of Pivot point (the blue dotted line) and the fibo extension of 127.0%.
At 7:51 on blue lag moving passed the 15 level and approaching the diagonal resistance line, made a buy entry. EURJPY then sprang up like a spring after 2 hours of consolidating.
