EURJPY has reached the 150 level of the strong upside resistance near a previous top from 2015 which is still sideways within not so steep uptrend channel. A recent bounce was not confirmed and the EURJPY is now under pressure for the downside.
The weekly EURJPY chart is showing a triangle that can be defined at this stage as an uptrend continuation triangle. But the lack of a significant break above 144.50 is opening the door for a possible reversal lower and a test of 139.50 which is a downside resistance. Now only a break above 144.50 will invalidate the downside in the short term but a break above 149.50 then is required for a nice long trade.
As the famous trader says…
“I believe in analysis and not forecasting.”
Nicolas Darvas
How to trade this?
Obviously, for Q3 2023, we have this upside resistance of 149.50 which should be broken higher for an upside continuation. This means that now short trade entries have some advantage over long trade entries as the overall long-term trend is still uptrend but a break above the strong resistance still is not confirmed. You should open a short trade here first. The risk to reward on this trade is higher than 1 and the timing of the trade could be on Monday NY session with the stop loss above 146 to target the first 139 and if broken 132.
