This piece is about the EURJPY pair. We mentioned this instrument in Friday’s daily analytical report and, unsurprisingly, we were right about the direction. On the 22nd of February, we were optimistic about the future of this currency because of the symmetrical triangle and the flag. This is precisely what we said:
“EURJPY is getting ready for a bigger upswing. The positive scenario here comes from the fact that the price has broken out of the symmetrical triangle pattern. What’s more, we broke the horizontal resistance at 125.45 and then formed a bullish flag (black lines). The flag is promoting a bullish breakout and a further rise.”
We got the direction right, but the second formation turned out a bit different. Instead of a flag, EURJPY ended up forming a smaller triangle; a pennant in fact (black lines). The pennant, as expected, ended with the breakout of its upper line. The closest targets at the moment are the highs from February; slightly below 126. Once those are broken, we will receive a proper, mid-term buy signal. Chances of that are pretty nice.