The currency market just seem to love channels at the moment, I’ve got a whole heap I’ve got marked out and watching at the moment.
EURJPY has been respecting this long term channel for the last 6 or so months, and now we’re seeing a test of this important structure.
There are a couple of strong price action elements here coming together to promote a bounce here.
The first obviously the channel bottom, but we can also see a horizontal support level when we look to the left.
EURJPY has also sold off fast and become a little overextended from it’s mean, and this kind of over extension encourages a mean reversion.
We can already see lower wicks developing on the intraday charts and the daily Chart as well as a sign of strength entering the market at this anticipated turning point.
If EURJPY follows up with a bounce here, and fires up a bullish channel cycle, there should be an easy 3x, 4x reward (ROI) output on this setup.
Best of luck on the charts.
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