Good morning guys,
Here's a 4 hour analysis of Pound-Yen. Let's break it down from weekly to 1 hour:
So, I'm gonna wait for some retest at the downside, price to create a double bottom or to break the 14 EMA and consolidate a little bit there. Gonna look at the 1 hour and visualize what's going on. Then, jump to the 15minute chart and get the sexiest entry I can spot.
Of course, if price action doesn't play out like this, I'm just gonna wait for another last kiss and jump in sells.
See ya.
Here's a 4 hour analysis of Pound-Yen. Let's break it down from weekly to 1 hour:
- WEEKLY
On the weekly chart, we can see the strong bearish momentum we had in the first week of the month, following up that beautiful pin bar that was rejected from the 200 EMA and broke that up trend line. Although bears are in control, nobody wants to jump in sells (if we are going further down) while the train is moving. So, as we've reached a important and strong support area (and both psychological and fundamental, but that's a story for another day), price might retrace hard to grab some liquidity and orders to continue it's down momentum (or create a lower high, as you wish to call it). Remember it's GJ, so it will moves like a crazy horse without brakes. Of course, we are going to forget this idea if it continues moving down and doesn't get oxygen on its race. So, ALWAYS wait for price action to show clear breaks, last kisses and sup/res.
- DAILY
On daily, the same idea applies: we have that strong support (just look on the weekly chart how price reacted every time it has reached that price zone), a clear daily trendline which is about to reject something (it already formed a wick, but remember we are in a strong bearish momentum) and not a single bull candle through all those candles. So, if price action shows us and price starts to retrace, create wicks and take a bear-break, we are going at least to the 200 Daily EMA (the pink one). Hey, if you were a bank and you were aiming for sells, would you jump right in or would you drive price back to a premium area where you could enter with beautiful prices and make some pennies? Also, there's the fundamentals (but this is too long to write here), telling why that price area is not that interesting to be at right now.
- 4 HOUR
Now, in the 4 hour chart, things get way clearer:
we have two beautiful daily lower highs. we have beautiful bearish momentum breaking every support and emas on its way (and also retesting... looks like a school book). We have EMAs crossing and the 200 being left behind. We have a beautiful new deep low. So, besides that strange doji that appeared on that support area, why the hell would we look for buys here, if price action shows us? Well guys, we need a new lower high. Again, price needs to breath and grab some liquidity, premium price, retrace, touch the trendline or whatever. Hey, I might be wrong (as GJ likes to do that) and price will just dive down, but it doesn't seem logical.
It's a good R:R for a week swing trade, BUT, if we wait for price action to show us a clear path, we won't need a 60 pips SL. We'll barely need a 20 pips SL.
So, I'm gonna wait for some retest at the downside, price to create a double bottom or to break the 14 EMA and consolidate a little bit there. Gonna look at the 1 hour and visualize what's going on. Then, jump to the 15minute chart and get the sexiest entry I can spot.
Of course, if price action doesn't play out like this, I'm just gonna wait for another last kiss and jump in sells.
See ya.
Trade closed: target reached