The Pullback Is Almost Complete in EUR/JPY and the Trend Is Still Bearish
EUR/JPY has retraced higher in the last few session, but the trend is bearish and the retrace is nearly complete now
Earlier this week we had a sell signal in EUR/JPY which we opened as this pair was retracing higher during this downtrend, which started about a month ago. The retrace was almost complete but we decided to go short nonetheless, given the deteriorating sentiment in financial markets due to the escalating trade war.
The reversal took place after the price formed a doji candlestick on the H4 time-frame chart and the bearish trend resumed. But in the last few sessions we have been seeing another pullback higher and this pullback is almost complete again. The stochastic indicator is almost overbought.
Besides that, moving averages are catching up and they should bring an end to this pullback once they reach the price, or the price reaches them. By that time, stochastic will be overbought, which means that the retrace will be complete. So, we are following the price action in this pair, waiting for a reversing signal. Once we get it (pin/doji candlestick), then I will be persuaded to open another sell signal here.
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