Well, well, well...That chart we looked at for the EUR/JPY finally broke down, loosing the lower channel boundary. We will see tests of this channel, no doubt, and we MUST respect any movements back into the channel, as there will undoubtedly be many late longs and early shorts that combine to whipsaw, pushing the market higher, then lower, and so on and so forth until a new trend takes hold. The chart posted above shows the break down of the channel, and I want to point out that this is really a great type of trade entry to take, as long as you can safely manage the trade in case it reverses on you unexpectedly. When you are confronted with obvious divergences, especially as we saw here between PRICE and VOLUME, there is always a trade to be had sooner or later. One just needs to be patient and vigilant. We got lucky that this one broke relatively soon after I posted, but sometimes it can take quite a while, and be very frustrating, even to the point that you give up trying to enter right at the moment that it decides to break. Discipline. I have included profit targets ON the chart show above. Again, these are simply areas that I see price taking a breather at once the trend changes. It is possible that we retrace 50% of the move off of the local low from a week ago when the trend initially changed, and still continue higher. Always be careful, but these targets should be accurate if this price continues downward. I would use the channel boundary as a HARD STOP. Please trade wisely and carefully, process your own research as well. : )
I will follow with more posts on Monday, still watching the EUR/JPY, GBP/JPY, and USD/JPY for weakness, potential signs of topping, and singals that a trend change is in order or in process.
Happy Trading!
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