EURJPY POTENTIAL RESISTANCE
If the pair pulls back to either the 125 or 127 area there could be a potential opportunity for a short.
Reasons to short -
Trend is bearish
Returning to major SR levels (blue lines)
The 127 area (yellow box) would be preferable as the last time it was in this area there was a strong sell off, and this is the first time returning to this area. You can see this more clearly on the daily chart.
127 is also a 50% fibonacci retracement level from the previous high on the daily chart.
Good risk to reward ratio
However, keep on eye on the light pink area as this could also prove to be a resistance area. It is already pushing against the area and finding it hard to break through.
If you look on the weekly chart this pair has the possibility to move all the way down to the 120 area which would be a great risk to reward.
Reasons to short -
Trend is bearish
Returning to major SR levels (blue lines)
The 127 area (yellow box) would be preferable as the last time it was in this area there was a strong sell off, and this is the first time returning to this area. You can see this more clearly on the daily chart.
127 is also a 50% fibonacci retracement level from the previous high on the daily chart.
Good risk to reward ratio
However, keep on eye on the light pink area as this could also prove to be a resistance area. It is already pushing against the area and finding it hard to break through.
If you look on the weekly chart this pair has the possibility to move all the way down to the 120 area which would be a great risk to reward.
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