JPY showed it might during the New York session on the 21st January, in the aftermath of President Obama’s controversial plan to limit the size of US largest banks and what trading activities they could engage in.
EURJPY fall from 129.20 to 127.50 by the close on 21st January. The fall continued in the first hour of 22nd January to touch 126.30 before Tokyo open and then rebounded to 127.50.
EURJPY formed a pennant with the upper diagonal resistance line (A-A1) which was able to be penetrated in the afternoon session in Tokyo.
On 5MTF chart (the first chart above), there is an indication for buy entry at point 1 with blue lag moving above 15. At point 2, Blue lag crossed over the 85 from above which indicated a sell position but the red lag has not yet reached the 85 level. This clearly indicated that price will able to penetrate the diagonal resistance line A-A1. At point 3, the blue lag started to reverse its direction and moved toward 85. This occurred during my trading session.
On 1 MTF, at point A which is also at point 3 on the 5MTF, the blue lag is approaching the 15 level from below which triggers my buy entry. At point B, the blue lag has moved into 85 territory but the red lag has reversed its downward move to the upside. With BB Macd with a green dot moving passed the upper channel (blue line) which indicate a bullish move. The moving averages also confirm the bullish tone.
EURJPY subsequent uptrend move was quite impressive that within 30 minutes it gain 60 pips.
