Please read the entire blog post to have a better understanding of what's going on in the USDJPY chart.
As I have mentioned earlier in a few of my previous posts(ideas), that the pair of
USDJPY
shouldn't break the significant low that's made on 24th Sep 2019 if we want to stay long in the pair.
But, what did the USDJPY do? (The charts above show the zoomed-out 4-Hour charts)
- It took resistance from both the horizontal resistance (the red-broken line) and the trendline (the blue-broken line).
- The price then moved very fast with some big BEAR candles/bars.
- And then the price broke the significant low (106.960 JPY).
The above three are all the points that I suggested (in my earlier posts) we should keep ourselves away from if we wanted to stay bullish in this pair.
*TREND ANALYSIS* -
So, the trend in this market is not BULLISH. Its either range-bound or down-trend. We can say that the trend for this market is SIDEWAYS-to-DOWN for two following obvious reasons -
1st - The market broke above the prior significant-high (which proved that the market was no longer in a downtrend and that the market switched to a range-bound trend) and then the price wasn't able to give a new higher high after taking support from that significant-high ("RESISTANCE becoming SUPPORT" and thus forming a significant-low). So, we can't say that the price switched to an up-trend there.
2nd - The price then broke the significant-low which made the pair a bit BEARISH again.
The above chart shows the Daily-picture of this chart and what we might expect from it.
We should keep in mind that the Decsending-Triangle is not proven unless the Horizontal Support-line is broken.
The above chart is just food for thoughts.
*SUPPORT AND RESISTANCE ANALYSIS* -
The price, right now, is at the MA resistance-zone. The above chart shows some other resistance and support trend-lines and horizontal-levels that we should look out for.
*CANDLE ANALYSIS* -
In the last DOWN-move, the price moved down with pretty big bear bars. In that context, the bull bars that formed in the recent UP-move was not that impressive. So we can expect the market to resume the DOWN-move again.
Also, there is that steep slope in the recent UP-move which could suggest that the price is now at an OVERBOUGHT condition.
What more I need to be looking for in the candles before I take the short trade? ---------> **Very Important** ------> Conservative Approach
The price is making some strong BEAR bars (bars with closes near lows) and some BULL rejection bars (bars with big higher shadows).
The above chart shows the pictorial representation of the conservative approach
For Aggressive Traders -
You can take the trade right now because it's already at a price level where one can decide to short the market.
I don't know whether the Conservative approach is correct or the aggressive one. Sometimes the aggressive one is correct, sometimes the conservative approach is the one we should go with, and sometimes both the approaches are proven correct by the market. Both approaches have their pros and cons.
I have picked the conservative approach. You should pick your own. (Because Stops are dependent on them and putting stops at the right levels is an important part of this game)
*RED FLAGS* -
If the price doesn't go down even after the formation of strong bear-bars and starts to take support from the support-zone (represented by green broken-lines on the charts) then we have to look to exit our short trades. We should keep this at the back of our mind and not worry too much about it right now.
The best way to "TRADE MANAGEMENT" would be taking trades with 2 lots with appropriate stops above the significant highs @ 108.470 JPY or appropriate ATR stops above the current highs @ 107.600 JPY and targets at-
1. The next Support zone @ 106.000 JPY to 105.500 JPY
2. The 2nd lot to be squared off at the next Resistance levels or it will be left with trailing stops at appropriate levels.
This trade can have a reward – risk ratio of 3 or more if we play our cards right.
For traders who want to know more about my techniques or have any queries, you can chat with me directly through private chats. I will reply you back as fast as I can. Kindly like this post. Also, please do comment in the comment sections below. And I will love it if you follow me.
Thank You!
Disclaimer -
All the ideas posted on these posts are published in good faith and for general educational purposes only. Satx98 does not make any warranties about the completeness, reliability, and accuracy of this information. Any action, you take upon the ideas posted by me, is strictly at your own risk. I will not be liable for any losses and/or damages in connection with the use of my ideas.
As I have mentioned earlier in a few of my previous posts(ideas), that the pair of
USDJPY
shouldn't break the significant low that's made on 24th Sep 2019 if we want to stay long in the pair.
But, what did the USDJPY do? (The charts above show the zoomed-out 4-Hour charts)
- It took resistance from both the horizontal resistance (the red-broken line) and the trendline (the blue-broken line).
- The price then moved very fast with some big BEAR candles/bars.
- And then the price broke the significant low (106.960 JPY).
The above three are all the points that I suggested (in my earlier posts) we should keep ourselves away from if we wanted to stay bullish in this pair.
*TREND ANALYSIS* -
So, the trend in this market is not BULLISH. Its either range-bound or down-trend. We can say that the trend for this market is SIDEWAYS-to-DOWN for two following obvious reasons -
1st - The market broke above the prior significant-high (which proved that the market was no longer in a downtrend and that the market switched to a range-bound trend) and then the price wasn't able to give a new higher high after taking support from that significant-high ("RESISTANCE becoming SUPPORT" and thus forming a significant-low). So, we can't say that the price switched to an up-trend there.
2nd - The price then broke the significant-low which made the pair a bit BEARISH again.
The above chart shows the Daily-picture of this chart and what we might expect from it.
We should keep in mind that the Decsending-Triangle is not proven unless the Horizontal Support-line is broken.
The above chart is just food for thoughts.
*SUPPORT AND RESISTANCE ANALYSIS* -
The price, right now, is at the MA resistance-zone. The above chart shows some other resistance and support trend-lines and horizontal-levels that we should look out for.
*CANDLE ANALYSIS* -
In the last DOWN-move, the price moved down with pretty big bear bars. In that context, the bull bars that formed in the recent UP-move was not that impressive. So we can expect the market to resume the DOWN-move again.
Also, there is that steep slope in the recent UP-move which could suggest that the price is now at an OVERBOUGHT condition.
What more I need to be looking for in the candles before I take the short trade? ---------> **Very Important** ------> Conservative Approach
The price is making some strong BEAR bars (bars with closes near lows) and some BULL rejection bars (bars with big higher shadows).
For Aggressive Traders -
You can take the trade right now because it's already at a price level where one can decide to short the market.
I don't know whether the Conservative approach is correct or the aggressive one. Sometimes the aggressive one is correct, sometimes the conservative approach is the one we should go with, and sometimes both the approaches are proven correct by the market. Both approaches have their pros and cons.
I have picked the conservative approach. You should pick your own. (Because Stops are dependent on them and putting stops at the right levels is an important part of this game)
*RED FLAGS* -
The best way to "TRADE MANAGEMENT" would be taking trades with 2 lots with appropriate stops above the significant highs @ 108.470 JPY or appropriate ATR stops above the current highs @ 107.600 JPY and targets at-
1. The next Support zone @ 106.000 JPY to 105.500 JPY
2. The 2nd lot to be squared off at the next Resistance levels or it will be left with trailing stops at appropriate levels.
This trade can have a reward – risk ratio of 3 or more if we play our cards right.
For traders who want to know more about my techniques or have any queries, you can chat with me directly through private chats. I will reply you back as fast as I can. Kindly like this post. Also, please do comment in the comment sections below. And I will love it if you follow me.
Thank You!
Disclaimer -
All the ideas posted on these posts are published in good faith and for general educational purposes only. Satx98 does not make any warranties about the completeness, reliability, and accuracy of this information. Any action, you take upon the ideas posted by me, is strictly at your own risk. I will not be liable for any losses and/or damages in connection with the use of my ideas.