Today, we will be going over the euro versus the Japanese yen. In the previous blog on this pair, we were looking at the psychological round number of 123.000 holding as support which was achieved. Price went on to create a higher high which saw a 160 pip move to the upside, coming a few pips short of the first take profit region.
On the 4-hour chart above, we can see that there was candle confirmation on the 61.8 with a morning star formation. At market open there was a gap to the downside but price went on to create a higher high, there was a pullback to the neck line of the inverse head and shoulder but price ultimately broke lower finding support just below the key level of 124.000.
On the 1-hour chart, looking at the upper highlighted region, we can see that this weeks high of 124.700 has been holding as resistance. We could wait for a break of structure above the shown highlighted region and look for candle stick confirmation on the retest of 124.700 shown by the arrows.
Also, on the 1-hour time frame, if there is a break of structure but 124.700 does not hold as support we could use the fib tool to gain entry at one of the preferred fib levels. A reversal off either of the fib levels would print a potential inverse head and shoulder pattern which would line up with a retest of the neckline of the higher time frame inverse head and shoulder pattern.
Remember to stick to your personal trading plan and to always use the correct risk management. Subscribe to receive updates sent directly to your e-mail.