Saturday, May 12, 2018

The EUR/JPY Double Bottom Is A Signal For A Possible Rally

The double bottom can be seen on the D1 time frame (128.944 on 22nd March 2018 and 129.28 on 22nd May 2018).

Apart from that the last weekly candle is a pin bar, which confirms the scenario for a rally of this pair.

If this is a valid scenario, we could expect a move north to the first resistance at 131.50, followed by another rally to 132.50. If the pair breaks out above those resistance levels, we could expect a move up to 133.50.

Under any circumstances, however, this will be a corrective rally. To the downside there is a strong support around 127.00 and I think the pair will reach it once it’s done with the possible correction to the upside.