On July 15th I wrote about the bullish case for euro/yen (EUR/JPY), which was tracing out a symmetrical triangle within the context of an intermediate-term uptrend. The currency pair did end up breaking out and following through higher. Price is now testing a key Fibonacci resistance level at 140.988. This is a 61.8% retracement of the downtrend from July 2008 to July 2012. I’m also watching the top of Zoro’s signature. This is an estimate of upside potential based on a parallel line to the lower barrier of the triangle, applied to the first high of the triangle.
PARTIAL PROFIT
Position traders who bought in July should consider taking a partial profit in order to secure some gain and get some of your capital out of harm’s way, with price at resistance.
BOTTOM LINE
I do think it’s worth keeping some capital in this market because it’s trending well and doesn’t show any evidence of reversing. The crowd is buying at higher highs. And weekly RSI averages are confirming higher highs in price. Meanwhile, if you like this market but don’t have a position on, you’d be better off waiting for a consolidation or pullback so you’re not chasing a train that’s long out of the station.
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