Prior to the 4th of July holiday, I published a trade idea from this weekly chart - (See chart inset for notes) and inadvertently published it under EURJPY. I didn't change my Tradingview chart to NZDJPY and it happened to be on EURJPY. I then managed to write like the idea was for EURJPY, even though all of the prices were for NZDJPY...needless to say I ended up screwing up a nice chart idea and confusing other traders in the process. Anyway, here is the weekly chart for NZDJPY. (I linked this idea to my original write-up)
We are currently entered into a price cluster of resistance that stretches from 82.144 to 83.375. Should price break through these levels, it needs to break through the double top. In addition, for the rally to keep moving higher, the Inverse Head & Shoulders pattern needs to break through a price gap of resistance from 83.863 to 84.674.
This is a great deal of resistance to overcome. I'm not saying that it can't happen. I'm just very skeptical. I will be keeping my eye on this pair and should price stall out in the aforementioned resistance areas, I will be short. If price happens to break through all of these levels and stays above the gap, I will look to enter long on a retest or the break of a prior days high. Bottom line - I'm waiting to see what happens, then I will react. I'm not going short and stepping in front of a bull without price showing me weakness.
I apologize to any trader that looked at this idea as published under EURJPY. I tried to correct it in the comments, after a trader mentioned the chart inset dealing with NZDJPY. I'm republishing this in the correct forum to provide people this analysis because the idea is still in play and could be in play for a few weeks.
Great Analysis. I am short from 82.524 would you suggest closing trade and re-evaluate?
KennTrade
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@PaulSiljee, Paul, where is your hard or mental stop set at? What is your trading style ... short term - long term?? You currently have a 37 pip unrealized loss. However, price has entered into the resistance zones I wrote about...If you are comfortable at taking on a 250 pip stop (Upper Gap level), then you could wait it out. However, you would be incurring negative carry, since the JPY pays less interest than the Kiwi. So basically, while you are waiting for the trade to turn in your favor, you are losing money every day.
You have to make those decisions yourself and be okay with the outcome. If I tell you to get out, what's to say that Sunday afternoon, this pair doesn't drop like a stone and would've put you in profit?
This analysis is from a weekly chart - it could take MONTHS to play out. I don't know when...I just look at what the price action does and take my cues from there.
Good luck to you!!
PaulJonFX
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@KennTrade, Well 1st my trading style is long term swing trading. My SL is set at 84.1 with a TP set at 78.4. My analysis lines up with your charts and was great to see the confluence with the double top resistance that price would have to break through to continue higher. Like you said the swap fee is brutal with this pair but I will stick to my trading plan!
Thanks for your great analysis and response! Lets see how this plays out next week =)
KennTrade
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@PaulSiljee, Sounds Good! I appreciate your feedback.
@PaulSiljee, That resistance cluster is holding up, so far. It only got as high as 83.14. I went short at 82.867, so I'm in this with you!
PaulJonFX
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@KennTrade, Lets get it! We need to break back down through this support level here
PaulJonFX
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@PaulSiljee, welp all that momentum erased
KennTrade
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@PaulSiljee, It takes time for a strong uptrend to reverse. Bottom line is...there is a lot of resistance just above
the current price and sellers are currently trying to take control. You have your stop set...wait & see what happens.
PaulJonFX
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@KennTrade, Thanks Ken! Best of luck! Will check back in few days with ya