EUR/JPY Set Up for Asian Session

As traders gear up for tonight’s Asian session I will scan the charts again to see how the pairs came out of the afternoon doldrums. The 15 and 30 minute EUR/JPY have caught my eye. Here’s what I am watching:

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This is the a symmetrical triangle on the 15 minute time frame and it’s traveled into what I call the “narrows” (you know, where the pattern really puts the squeeze on price!) and a break seems imminent. Triangles are “self limiting” and that means if prices does nothing more than just go sideways, the pattern will eventually break.

The market cycle is sideways on this timeframe and that’s a major confirmation for trading ANY congestion/consolidation pattern.

The MACD-H (MACD Histogram) is positive and for now I will look for the pattern to break to the upside. This isn’t set in stone though…so keep an eye on the break and then confirm it with the MACD-H.

The 30 minute time frame has some important info and that’s a the horizontal level waiting above. That represents the breakout level for the 30 and a great place to place an initial profit target on the potential 15 minute breakout.

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Don’t forget about the 132.00 level! If prices break down below 131.95 there’s a short set up on the 15 minute as prices break the 131.90 level and the uptrend line of the triangle. On the 30 minute chart keep an eye on the uptrend line of the triangle which is pretty much the same short trigger as the 15 minute chart. For either trigger the MACD-H has to be negative for confirm the breakdown.