Profit taking of EURJPY pair was clearly evidence since early of the week. EURJPY was on the uptrend since early last week that ended with a high of 125.22 at early hour of Tokyo opening session. Profit taking pushed EURJPY to Monday intraday low of 123.63 at noon New York session.
Consolidation of EURJPY continued to late Asian session on Tuesday with a temporary strong upward reaction during the early European session.
For my scalping trade, let us run through the 5 MTF for Monday(22nd Feb) and Tuesday(23rd Feb).
Monday:
At point A, EURJPY look overbought since the blue lag has moved passed 85 and hovering above 45 and turning downward. Red lag has crossed 45 but showing sign of turning downward. MACD-the signal line and the MACD line is at the zero line for almost 3 hours indicating consolidation and waiting for a breakout. Breakout occurred after price break the lower support line of the triangle .
The downtrend is stop at Pivot Point mid-level with a reversal piercing line candle formation. Price reacted upward point C with resistance of the moving average and Tokyo opening price. The downtrend is now confirmed with target at point D with support of Pivot Point and 1.618 fibo expansion.
Tuesday.
Morning Asian session was flat. Late asian session, a triangle was formed. At point A a sell entry was initiated as EURJPY was at overbought position with the blue lag has moved passed the 85 and the red lag was starting to edge downward. MACD signal line has crossed the MACD line and moving toward the zero line.
EURJPY make a false break of the triangle with a reversal at B with a hammer candlestick. The pivot mid point also act as support. Price expected to move to the Pivot point (point D) and then the 1.618 fibo extension.
