EURJPY Early Long Indication. . .

With the daily chart not giving any indication of price action I have 'zoomed' down to the 1hr time frame to have a look

Zooming down to the 1hr chart we will see that the last swing low has not gone below the previous swing low (see the highlighted areas on the chart above. Also, the last retracement is bouncing off the 50% retracement long as highlighted in the chart above. So overall (based only on this lower TF chart) my bias is long. Take this with a grain of salt because the last weekly candle was a bearish engulfing and we already saw that candle pattern work very well on the daily chart a few days ago.

All that said you can see that I have gone long here. This is a very early indication to go long and this is NOT a trade recommendation. My trade parameters dictate that I am risking less than 1% on the account if I am stopped out at this level. If you decide to trade based on what I am showing here please use a demo account or at least have a very good awareness of the potential loss to any account you are trading.

EURJPY No clear direction

The last formed daily candle has not given any indication of direction. The market is ranging. Todays price action did not break the highs or lows of the previous day.
Sometimes staying out of the market is the best option.

On another note the first friday of each month is NFP. NFP is a jobs report and usually has a high impact on the markets. I think alot of traders are now waiting for the NFP announcement to see if a market direction will show itself.

EURJPY Candlestick analysis

Well we did not get the close 50% up into the body of the previous day that we were looking for which would have created a piercing candle. Instead what we ended up with is basically a 'spinning top' although a spinning top generally has a small body with long wicks on either side. The spinning top represents indecision between buyers (bulls) and sellers (bears) and as a result is a fairly 'neutral' formation. We will have to wait for the next candle to see if any direction becomes apparent.

EURJPY Analysis

The last trade setup did not trigger and last Friday saw a strong move to the downside. Any pending trades based on previous analysis should now be cancelled.

Todays open candle opened with a gap to the downside and then continued into a strong resistance zone. Then price moved swiftly up from that zone and closed the open gap. Experienced trades could have taken advantage of the this movement and made a nice profit.

When a candle opens below the close of the previous day and then closes up into the previous days candle AND closes 50% or more up into the candle it is a 'Piercing Candle'. The piercing candle is another japanese candlestick formation and is considered a reversal candle especially when bounceing up off of a resistance level. The further past 50% the candle goes into the previous candle the stronger the signal is considered. Of course if it goes beyond the previous candle open we will have a 'bullish engulping' candle.

So we will see what the close of this days candle will bring and then make a decision on what play to make if any.

Of note also is that the we are now starting not only a new day, but also a new week and indeed a new month. At this time we should consider the weekly and monthly charts for candlestick formations that may signal us to upcoming price action :-)