On the Weekly chart the EURJPY has broken the old high as it confirms the new uptrend uptrend.
Looking at the Daily chart, below, we can see this new uptrend in place with higher highs and accompanying higher lows.
The 10 and 20 moving averages are in the correct order and 50 and 200 MA’s have rounded into the correct place in agreement with the trend.
After three days of selloff, the retracement into the ‘buy zone’ between the 10 and 20 moving averages has found price equilibrium and today’s candle has opened bullish, taking out yesterday’s high for the day.
We label this a Trend Flow trade as it seeks out the point in the trend, after a retracement has occurred, were price action re-joins the trend in the prevailing direction of the upper time frames – in this case to the long side.
On the four hourly chart below, we can see in more detail the effect of the price action, creating the bullish sentiment to the long side.
Notice that the MACD & RSI Indicators are convergent to a move in the direction of the prevailing trends on the upper time frames.
Today’s price action should demonstrate the sentiment on this pair. A trading opportunity to the long side is possible and a trading widow up to the old highs of 138.900 would present a good risk to reward outcome.