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TREND IN FOCUS: EURJPY (H1)
- The EURJPY recently broke out of a descending channel that guided price from June 20 through June 27.
- The daily candle shows a Doji/Inverted Hammer forming; and the H4 candle for the 01:00 EDT to 05:00 EDT candle was an Inverted Hammer. Both of these suggest a near-term top potentially forming.
- Daily Slow Stochastics (5,3,3) remain bullish, having issued a buy signal on June 28.
- H1 Slow Stochastics (5,3,3) have started to turn, perhaps suggesting that early weakness may be overdone.
- While the preference is to get long the European currencies (CHF, GBP, EUR) against the Yen, lower timeframes (m15, m30) have started to turn bearish once more; accordingly there might be another intraday swing lower before the potential for a strong bounce in line with recent bullish trends in CHFJPY, GBPJPY, and EURJPY.
*Trend definitions: “uptrend” is defined as 8-MA>21-MA>55-MA; “downtrend” is defined as 8-MA<21-MA<55-MA; a “trendless” market occurs when continuity is absent.
*Scoring methodology: there are seven time frames, ascending from m15 (15-minutes) to W1 (one-week). In ascending order, each pair is assigned a value from -7 to +7 based on the trend apparent on the specified time frame (I.E. a m15 uptrend equals +1, whereas a H1 downtrend equals -3). If neither an uptrend nor downtrend is present, the trendless timeframe receives a score of 0. These points are totaled and the average is reported on the right. The strongest uptrend would achieve a score of +4.00, while the strongest downtrend would achieve a score of -4.00.
--- Written by Christopher Vecchio, Currency Analyst
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