Strong volatility was experienced on Friday and even if you were net long or short, scalpers made money. Anyhow, the end result mattered to me and as we can see, the open and close of that candlestick was below the lower BB and bullish. The thing with such patterns is that often prices have a way of rebounding and correcting the obvious under-valuation. We are beginning to see that developing and with higher highs in lower time frames, it couldn’t be a better time to begin hunting for buy opportunities in lower time frames.
Besides the undervaluation, Euro prices are reversing right from the 61.8% Fibonacci retracement line and syncing with the general bullish pressure which we saw in the previous quarter. Euro bulls can decide to enter now but the best approach is to wait for a close above the 38.2% Fibonacci retracement level and go long. Otherwise, if you want to refine your entry, we can have a look at the 4HR chart.
Here, there is a nice double bar reversal pattern with the bearish candlestick still constraining prices from inching higher. It’s for this reason why I recommend placing buy stops above ¥134 as that would entail a break out.
This is my EURJPY Trade plan:
Buy Stop: ¥134
Stop Loss: ¥133.30
Take Profit: ¥137
Let me know what you think.