Trade of the Day: EUR/JPY

By: Dima Chernovolov

EUR/JPY continues to rise inside the hourly Down Channel chart pattern which was previously identified by Autochartist. Autochartist rates the quality of this Down Channel at the 5-bar level – which is the result of the above-average Initial Trend (6 bars), lower Uniformity (3 bars), and medium Clarity (5 bars). EUR/JPY is expected to rise further inside this Down Channel – in line with the earlier sharp upward reversal from the key support area shown below.

As can be seen from the daily EUR/JPY chart below – the pair recently reversed up from the strong support area lying between the long-term support level 115.85 (which started the sharp uptrend in September) and the lower daily Bollinger Band. The proximity of this support area increases the probability EUR/JPY will continue to rise inside this Down Channel.