In the EURJPY Renko technical analysis, I make use of two different fixed box size in order to fine tune the entries and also to possibly identify what’s going on in the market.
The main Renko chart to use would be a 50pip fixed box size, while we zoom into at 25pip fixed box size to pick the entries.
The first chart below is the 50 pip renko chart for EURJPY which gives a longer term view of the markets. Here, we notice a very long term descending triangle being formed, with the support sitting in 136.629. Price recently rallied back from this support level. I have also plotted a long term trend line which was broken. Putting these two together, we can deduce that the current rally should most likely end in the region of 140.38 – 139.63 levels, the same levels where EURJPY first broke the trend line. We also notice a minor inherent weakness between the lows near the support line, where EURJPY made a lower low and RSI made a higher low.
This validates the corrective rally.
The downside targets on this long term EURJPY renko charts puts EURJPY to levels of 128.379
When we focus on the 25 pip EURJPY Renko chart, we get a completely different picture but one which validates the rally from the main 50 pip EURJPY renko chart. Here, we notice a short term falling resistance trend line that was broken at 137.879. We can therefore expect to see a drop back to this level for price to retest the break out befor pushing higher towards the target of 139.63. The basis of this analysis is taken from Renko Trend line breakout method outlined here.
The risk of course is that price could just continue to rally on without any retracement. In either case, if a retracement to 137.88 does happen, it could make it a prime level to go long from, targeting 139.63 and 140 levels, before reversing lower.
From the above, traders can either look for EURJPY short opportunities near 139/140 levels targeting 128/129 levels or look to go long from 138 levels targeting 139/140.