Euro/Yen has an established trend channel, that is validated since 6th April. It’s now bouncing off the lower line and getting near the upper part of the channel, which makes it an interesting pair to watch right now.
Looking at what’s happening right now, the pair has shown weakness before, at these prices, by the end of yesterday’s NY session. This is marked by the red circle above the up bars. There was an effort to take prices higher, which can be seen by the very high volume bars (red histograms) and with prices going up in a wide range. It could have been strong if it had broken the 127 83 level, which was the nearest resistance. But instead, prices went sideways and then corrected in today’s London session.
Today the market showed demand, marked by the blue dot and by up wide range bars with very high volume. The smart money sure is buying at this price level, the question is whether it’s going to be enough to turn the trend (i.e. breaking the down trendline). The background is still marking it as weak since the market is still in a downtrend, and there needs to be a trendline break to confirm a trend change. More weakness at this price level would be very bearish though, and if on sufficient high volume, it would nullify the recent strength and keep the trend going.
In a simplified way, we will either enter in the Supply/Demand in a trend setup or Trend Changing setup.