Fundamentals:
- Euro strong/mixed:
As we already know from my last setup ideas, Eurozone fundamentals are still mixed with negative and positive elements. New case counts are depreciating in Germany and the lockdown easing should take place in the next weeks/months. Economy will be stimulated by new waves of retail spending. Also, we just heard that Eurozone wants to ease restriction for non-essential tourists from the US and other countries like Honk-Kong and Lebanon. This will also be great for tourism, retail spending, so it will also be good for GDP to expand in H2 2021. Exports from Germany are also expanding. All of this has no effect for the moment on the market, but it will when those elements take effect.
- Yen super-weak:
Japan economy has a final GDP in contraction (-1,0%) for Q1 2021 which means that the economy is contracting and not expanding. Trade balance (import/export) is also contracting; Japan imported more goods than it exported. On top of all of this, emergency state in big regions is still on (until June 20th) and add pressure on retail consuming and labour market. Vaccine roll out very slow so there is still risk of new coronavirus wave. Energy resource prices and commodity prices are on the rise and could have a negative effect on trade terms. Note than Japan is very dependant on commodities imports. Finally, we already know it from my previous analysis and I will say it again, Tokyo will have a electricity deficiency during the summer and maybe during the winter which will be a negative for the region's productivity.
Market sentiment:
First of all, I look at what will the retail noobs do. Here, we can see a too obvious head and shoulder formation on the H4 timeframe. Obviously, people are excited and will sell at the neckline breakout. Even if I'm not in a position in which I have liquidity problems, I trade like I have liquidity problems: I will use sellers' liquidity so I can buy at a better price.
Second, I know that there is big institutional sellers that are in a short from 133,648 and will start to take profit at 132,550. Sellers that take profit become buyers.
Finally, Institutional buyers bought that same price previously (see last impulse up), and if they are still bullish fundamentally, they will use this price to buy again.
Conclusion:
With the fundamental situation, I know that big players are bullish and preparing to buy because of the actual ranging period. (or wedge... whatever you wanna call it) So I am bullish too.
Using the market sentiment, I determined my timing and the reasons behind my final positioning decision.
Finally, advanced technical analysis to see if this idea is worth it and if I have a technical reason to enter.
Daily tip:
1. Fundamental is #1
2. Always do the opposite of other retail traders
3. I could take this trade without any technical analysis and still have a win if my fundamentals are right and my timing is right. Technical is always last.
- Euro strong/mixed:
As we already know from my last setup ideas, Eurozone fundamentals are still mixed with negative and positive elements. New case counts are depreciating in Germany and the lockdown easing should take place in the next weeks/months. Economy will be stimulated by new waves of retail spending. Also, we just heard that Eurozone wants to ease restriction for non-essential tourists from the US and other countries like Honk-Kong and Lebanon. This will also be great for tourism, retail spending, so it will also be good for GDP to expand in H2 2021. Exports from Germany are also expanding. All of this has no effect for the moment on the market, but it will when those elements take effect.
- Yen super-weak:
Japan economy has a final GDP in contraction (-1,0%) for Q1 2021 which means that the economy is contracting and not expanding. Trade balance (import/export) is also contracting; Japan imported more goods than it exported. On top of all of this, emergency state in big regions is still on (until June 20th) and add pressure on retail consuming and labour market. Vaccine roll out very slow so there is still risk of new coronavirus wave. Energy resource prices and commodity prices are on the rise and could have a negative effect on trade terms. Note than Japan is very dependant on commodities imports. Finally, we already know it from my previous analysis and I will say it again, Tokyo will have a electricity deficiency during the summer and maybe during the winter which will be a negative for the region's productivity.
Market sentiment:
First of all, I look at what will the retail noobs do. Here, we can see a too obvious head and shoulder formation on the H4 timeframe. Obviously, people are excited and will sell at the neckline breakout. Even if I'm not in a position in which I have liquidity problems, I trade like I have liquidity problems: I will use sellers' liquidity so I can buy at a better price.
Second, I know that there is big institutional sellers that are in a short from 133,648 and will start to take profit at 132,550. Sellers that take profit become buyers.
Finally, Institutional buyers bought that same price previously (see last impulse up), and if they are still bullish fundamentally, they will use this price to buy again.
Conclusion:
With the fundamental situation, I know that big players are bullish and preparing to buy because of the actual ranging period. (or wedge... whatever you wanna call it) So I am bullish too.
Using the market sentiment, I determined my timing and the reasons behind my final positioning decision.
Finally, advanced technical analysis to see if this idea is worth it and if I have a technical reason to enter.
Daily tip:
1. Fundamental is #1
2. Always do the opposite of other retail traders
3. I could take this trade without any technical analysis and still have a win if my fundamentals are right and my timing is right. Technical is always last.
Trade closed: stop reached