Bullish Flag on EUR/JPY Promises Another Upswing

During the month that should have been a disaster for the euro, the EUR/JPY currency pair has formed a nice bullish flag. Its pole is on December 3 when ECB’s Mario Draghi refused to ease the eurozone’s monetary policy as much as the Forex market participants had expected of him. Then the flag part has been formed as a modest correction during six full daily trading sessions.
The flag pattern is marked with the yellow lines on the image below. The entry level is the cyan line at 10% of the pole’s height above the upper border. The target level is the green line at 100% of the pole’s length above the upper border. I will set my stop-loss to the low of the breakout bar unless it is mostly outside of the flag. In that case, I will set my SL to the low of the previous bar. Bullish flag is the uptrend continuation pattern so I will ignore a downward breakout from this formation. You can click on the image to see a full-sized screenshot:

I have used the ChannelPattern script to help me build the entry and exit levels for this setup. You can download my MetaTrader 4 chart template for this EUR/JPY pattern. You can trade it using my free Chart Pattern Helper EA.
Update 2015-12-14: Fixed an error in the MT4 chart template, which prevented the Chart Pattern Helper EA from trading this pattern.
Update 2015-12-18: I have canceled the trade setup as the pattern is no longer valid after this morning’s huge drop:


If you have any questions or comments regarding this bullish flag on EUR/JPY chart, please feel free to submit them via the form below.