The Dragon Hits Key Resistance Time To Sell With 195 In Sight?
The Dragon has been surging since the start of the Year even more after my initial trade idea from January which did hit my first target of 185 it has now rallied to new highs and sitting at a key Monthly level so what next ?
Personally I think once again we have a nice shorting opportunity as we are at a key Monthly resistance level that goes all the way back to 2008 (marked in red) sitting around the 193 level.
When price broke through this level in Oct 2008 it dropped nearly 7000 pips in a matter of Months and at the same time creating a nice Monthly SUPPLY/SELL zone.
It took 7 years for price to grind it's way back up to this resistance level and when it did once again there was another HUGE near 7000 pip drop hitting the bottom in 2016 .
It has taken just over 7 years once again to get back up to this resistance will history repeat ?
Personally I think that there will 100% be a sell off once again at this level though I don't think it will drop as much as the last time though several thousand pips is a possibility.
The daily chart below is showing us that price momentum is starting to slow down with the sideways movement as it approaches the key resistance, the image below shows you the initial strong trend up, followed by sideways price action, each time price broke to a new high it was quickly sold off to the bottom of the range until we finally got to the resistance level.
With the weakness in the Yen this week I can't rule out a run up to the 2015 highs around 195 so my plan of attack is to use my TRFX indicator and look for daily SELL signals from now.
First target for this trade will be the bottom of the sideways channel you can see in the daily chart above @180 price could gain some large buying attention here that could build momentum to break this resistance level.
If there is a clean break of the monthly resistance then there isn't much stopping this pair moving straight up to the 200 level which is the 0.618 Monthly fib level from the downtrend that started in 2007 (see image below)
It's going to be an interested next few weeks to see how this one plays out :)
Personally I think once again we have a nice shorting opportunity as we are at a key Monthly resistance level that goes all the way back to 2008 (marked in red) sitting around the 193 level.
When price broke through this level in Oct 2008 it dropped nearly 7000 pips in a matter of Months and at the same time creating a nice Monthly SUPPLY/SELL zone.
It took 7 years for price to grind it's way back up to this resistance level and when it did once again there was another HUGE near 7000 pip drop hitting the bottom in 2016 .
It has taken just over 7 years once again to get back up to this resistance will history repeat ?
Personally I think that there will 100% be a sell off once again at this level though I don't think it will drop as much as the last time though several thousand pips is a possibility.
The daily chart below is showing us that price momentum is starting to slow down with the sideways movement as it approaches the key resistance, the image below shows you the initial strong trend up, followed by sideways price action, each time price broke to a new high it was quickly sold off to the bottom of the range until we finally got to the resistance level.
With the weakness in the Yen this week I can't rule out a run up to the 2015 highs around 195 so my plan of attack is to use my TRFX indicator and look for daily SELL signals from now.
First target for this trade will be the bottom of the sideways channel you can see in the daily chart above @180 price could gain some large buying attention here that could build momentum to break this resistance level.
If there is a clean break of the monthly resistance then there isn't much stopping this pair moving straight up to the 200 level which is the 0.618 Monthly fib level from the downtrend that started in 2007 (see image below)
It's going to be an interested next few weeks to see how this one plays out :)
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Access my Weekly Swing trade setups here - www.forexcopierpro.com/forex-signals-page-info
Join Telegram group -https://t.me/+T7V_JSiKKsliMTJl
