- Eurjpy has been a strong uptrend lately. The catalyst to this strong move to the upside was the Inverse head and shoulder that formed.
- Price broke the neckline of the IHS which also served as a level of resistance. Because price broke this level, it will now serve as support.
The break of the neckline caused price to create a new high (or higher high).
- Therefore I am looking to sell the retracement to test the neckline (the new support level) which should create a higher low.
- I drew a Fibonacci from the most recent higher low to the new high. I am expecting price to retrace to the golden area of 50.0-61.8 Fibonacci level which correlates to the anticipated support level and hopefully respect the trendline.
- Also if you take a look at the RSI, there is a bearish divergence that exist.
Like, or comment if you see something different. Feel free to post your analysis if you have a different point of view. I am open to all comments!!