EURJPY – THE BREAK AND WHAT TO EXPECT GOING FORWARD.

10.16.2021

I will argue, sometimes with vehemence, that FX is the ultimate MACRO asset. G-10 FX is the grease that keeps the engine running in capital markets. Of that bunch, other than the mighty USD, the EUR and the JPY are massive, so EURJPY is, by default, a crucial component in the GLOBAL MACRO fame-work. Here is the MONTHLY CHART.

1- The A-B-C extension (to 134.52) was picture perfect.

2- The CHANNEL BREAK is BULLISH

3- It seems like we are starting a new count, higher.

4- 134.52 becomes an important PIVOT POINT.

5- We should be looking for engagement zones to participate in what seems to be a new trend higher.

Lets BREAK DOWN the EXTENSION (a-b-c) and look for a BUY ZONE that has the RISK REWARD parameters we look for.

128.06 is extremely important support, but as traders we need more, a level that is more actionable. We look closer.

The 4-hour TIME FRAME offers a closer look and a clean EW count with an extension target: 135.90. Now we have to find levels of engagement where we wont get chopped up. Remember, RISK CAPITAL deployment has many factors, one of which is PSYCHOLOGY. If we are ultimately correct, we do not want negative PL to be a factor in us “relinquishing a good trade”

So we look deeper

The HOURLY CHART – we find our ENGAGEMENT ZONE and it has GREAT RISK REWARD.

131.00 is a level of interest. A minor count where the 38.2% FIBO levels coincides with a hypothetical wave 4. We want to BUY EURJPY ahead of that, and leave a STOP LOSS below Wave 1’s top (sub 130.44)

We have our GAME PLAN.

This is how we trade, on our terms.