EUR/JPY is Inside a Descending Channel

In this analysis I will go into depth on the descending channel.

There are a few properties of the channel that make this moment a great time to enter a short trade on EUR/JPY.

First of all, the channel is sharply declining. This means that the likelihood of each subsequent candle being red is slightly larger than it being green. This gives us a negative bias, favouring a short position.

Since the price is currently near the top of the descending channel, we can getthe best risk-reward for trades using support and resistance lines. If the price does break through the resistance in the end, the loss is minimized. If the price follows our idea, we maximize the profits taking full advantage of the width of the channel.

Lastly, forex is very trend heavy. Since we see a negative trend here for EURJPY that already lasts for almost a month, we can try to get some nice trades in.

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Disclaimer!
This post does not provide financial advice. It is for educational purposes only!


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