Possible confirmation of the Double Bottom formation on the EUR/JPY.

A Double Bottom formation is a bullish reversal chart pattern where the price visits two times the same support area and bounces to the upside changing direction. On the four hour chart below of the EUR/JPY we can clearly see a well-defined Double Bottom formation.

First, the price drops to the support level at the 137.71 and bounces to the upside when the bulls come in and try to take the price higher, but then the bears take control of the market again and have the price drop to the 137.71 for a second time. From this point on the price goes back up and reaches again the resistance at the 138.55 creating the neckline or confirmation line.

If we see two or more bullish candles above the 138.55 level, then we can say that the breakout has been confirmed. But we should patiently wait for the pullback to this same level of the 138.55 for a possible long entry. Therefore, we should pay attention to this pair, because it may present us with a very good opportunity to enter the market.