EURJPY Potential Short Setup
The EURJPY pair is currently displaying indications of a potential short trading opportunity. Here's an overview of the market dynamics and factors to consider:
Current Trading Situation: EJ is presently trading within a topping range, contained within a larger channel that features a lower base broadening pattern. Notably, the price trajectory has been marked by distinct lower lows, and it appears that the price is in the process of forming its first lower high. A potential deviation from this scenario could occur if the price rebounds back to the 158 range. In such an event, a reevaluation of entry points and maybe even bias might be necessary.
Momentum of the Yen: There is observable momentum and strength building within the Yen. This upswing in Yen strength could be attributed to shifts in the monetary policy landscape.
Japanese Economic Factors: Japan is grappling with the emergence of rising inflation, an occurrence that has been uncommon for a considerable period. The Bank of Japan (BoJ) making adjustments to its yield curve control policy, which could indicate a shift towards a more hawkish policy stance.
Policy Contrast: Against this backdrop, it's interesting to note the contrasting policy trajectories of central banks. While Japan seems poised for a potentially more hawkish stance, Europe finds itself navigating towards a deep recession, grappling with record-high interest rates, and witnessing a gradual decline in inflation. The European Central Bank (ECB) already announced they will be positioned more on the sidelines, indicating a potential shift towards a more dovish policy. However, rising energy costs have the potential to significantly disrupt that scenario.
However, In the short term, there seems to be a likelihood of Yen strength, possibly due to the market pricing in the BoJ's policy shift. This scenario hinges on the interaction between price dynamics, economic data, and central bank policies.
In conclusion, the current market setup presents intriguing prospects for a potential short trade. It's going to be very interesting to closely monitor price behavior within the topping range, keeping an eye on confluences with economic indicators and central bank policies. These combined factors could influence the price trajectory, potentially leading to a even bigger downward movement.
Current Trading Situation: EJ is presently trading within a topping range, contained within a larger channel that features a lower base broadening pattern. Notably, the price trajectory has been marked by distinct lower lows, and it appears that the price is in the process of forming its first lower high. A potential deviation from this scenario could occur if the price rebounds back to the 158 range. In such an event, a reevaluation of entry points and maybe even bias might be necessary.
Momentum of the Yen: There is observable momentum and strength building within the Yen. This upswing in Yen strength could be attributed to shifts in the monetary policy landscape.
Japanese Economic Factors: Japan is grappling with the emergence of rising inflation, an occurrence that has been uncommon for a considerable period. The Bank of Japan (BoJ) making adjustments to its yield curve control policy, which could indicate a shift towards a more hawkish policy stance.
Policy Contrast: Against this backdrop, it's interesting to note the contrasting policy trajectories of central banks. While Japan seems poised for a potentially more hawkish stance, Europe finds itself navigating towards a deep recession, grappling with record-high interest rates, and witnessing a gradual decline in inflation. The European Central Bank (ECB) already announced they will be positioned more on the sidelines, indicating a potential shift towards a more dovish policy. However, rising energy costs have the potential to significantly disrupt that scenario.
However, In the short term, there seems to be a likelihood of Yen strength, possibly due to the market pricing in the BoJ's policy shift. This scenario hinges on the interaction between price dynamics, economic data, and central bank policies.
In conclusion, the current market setup presents intriguing prospects for a potential short trade. It's going to be very interesting to closely monitor price behavior within the topping range, keeping an eye on confluences with economic indicators and central bank policies. These combined factors could influence the price trajectory, potentially leading to a even bigger downward movement.
Comment:
An opportunity for a potential intraday short entry point seems to be shaping up on the hourly chart. Considering that there isn't any major news anticipated from either the EU or Yen this week, it's reasonable to expect a market characterized by consolidation rather than substantial fluctuations. Of course, as is common in trading, unexpected turns can always come into play.
Comment:
It appears that pasting a position box makes some people think this is literally the trade I will make, but that is certainly not the case. it's just the trade idea and where I look for potential setups. Also, I'm not a signal provider, so do not expect exact entree points and TP/SL's from me. It's just for fun and self improvement.
Well, the initial big swing trade idea isn't live yet, but the intraday setup above I did trade. Currently 2/3 of the position is closed as TP and the rest is being trailed. Cheers 🍸
Well, the initial big swing trade idea isn't live yet, but the intraday setup above I did trade. Currently 2/3 of the position is closed as TP and the rest is being trailed. Cheers 🍸
Comment:
It will be interesting to see if price can bounce of that purple zone, but it is notable that the sell off was catched by high volume and a potential base for a trend line, what appears to be shaping a potential rising wedge. Locally it created a HH, but zoomed out it still needs to go above 158 to break significant structure highs. So I will keep my SL on half the initial and see if price can strongly bounce downward. If that is the case I might add back to the short. Otherwise I will drag it to breakeven or take a small lose and keep an eye on potential new intraday entrees.
Order cancelled:
Well that trail was a loss. Price rallied up. Price broke the 158 highs. So the swing short setup is off the table.
On the daily below you can see the clear breakout. My MA's also turning green and trend indicator pasting a white candle again so far. Will look for longs on the smaller time frames.
Case closed
On the daily below you can see the clear breakout. My MA's also turning green and trend indicator pasting a white candle again so far. Will look for longs on the smaller time frames.