Article Summary: The EURJPY has advanced 999 pips from the December low. As trading opens for 2013, short term market momentum can be used to identify fresh Forex scalping opportunities.
Trading short term trends in the Forex market relies heavily on identifying momentum. Regardless of the scalping strategy we ultimately end up trading, it is always important to determine if we are looking to buy or sell a currency pair prior to proceeding with our technical analysis on shorter term time charts. Today we will review the ongoing EURJPY trend and see if there is an opportunity for continued upside momentum.
The EURJPY has continued to be an excellent choice for scalpers since we last discussed its movements on December 5th. Looking back on the 4Hour chart below, the EURJPY has advanced in price as much as 999 pips from its December 2012 lows. With price now breaking higher highs to start 2013 trading, we will turn to our Building Blocks to find the key points in momentum for scalping opportunities.
Learn Forex – EURJPY 4Hour Trend
(Created using FXCM’s Marketscope 2.0 charts)
EURJPY Building Blocks
Pictured below we can see our current Building Blocks for the EURJPY updated through todays pricing on a 30 minute graph. The analysis for Block 1 began on Wednesday December 26th. From this point the market made a seemingly one way move, advancing as much as 293 from its Block 1 low at 111.75 114.68. From this point the market slowly advanced confirming market momentum to the upside by printing a Block 1 high at 107.65.
As we have previously discussed, strong trends must have price in both Building Blocks heading in the same direction. Our analysis reveals that the standing low on the EURJPY resides inside of Block 2 at 113.10, which is considerably higher than the low found in Block 1. With both a higher high and a lower high being printed, Block 2 is indicative of strong continued upside momentum.
Learn Forex – EURJPY Building Blocks
(Created using FXCM’s Marketscope 2.0 charts)
With both building blocks in the graph above painted blue and price pointing higher, the short term trend for the EURJPY remains upward. With the current direction of momentum identified scalpers will look to buy the EURJPY on future market advances. Alternative scenarios include a breakout under the Block 2 support, residing at its low at 113.10. A move below this point would conclude the EURJPYs current bull run,while temporarily changing the trading bias on the EURJPY.
---Written by Walker England, Trading Instructor
To contact Walker, email WEngland@FXCM.com . Follow me on Twitter at @WEnglandFX.
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