EUR/JPY Hammer for upside to 123.500
EUR/JPY 1-hour downtrend could now be over with huge spike in volume but no follow through absorbing selling pressure. Bullish hammer also confirmed at double bottom support line on daily.
A clean close above the trend line would be desirable for confirmation entry, but an optimal signal can also be a close above the hammer high. EUR/JPY has great reward to risk ratio within this pattern.
- Price holding below the 200 EMA
- Price holding below the 50 EMA
- Bullish hammer candle confirmed
- Lower Bollinger band with absorption volume
- RSI in oversold territory
Support – 122.570, 122.670
Resistance – 50 EMA, 200 EMA, 123.480
Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.
Optimal Entry – 122.670
Supporting Entry – 122.750
Candle Reversals for entry
As traders, it is your job to mitigate the risk and only trade structures that provide high probability and great reward to risk ratios.
If you are not comfortable with defined exit levels, experiment with Moving Averages to help set solid exit rules to protect your capital.
IF: Price breaks below 122.400– this would suggest the structure is not in our favour and would be wise to reduce exposure or close the trade until a solid signal gives us reasons to re-enter.
Reward / Reward Targets:
Optimal Entry 122.670 – Target 1 123.480 = 3x Reward to Risk
Supporting Entry 122.750 – Target 1 123.480 = 2.5x Reward to Risk