UsdJpy

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Price is in swap area - swap area holds and price moves to 110.60 or swap area or we see a fail of the swap area to 107.70 - first challenge in sight

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Hi, could you please explain what is swap area?

Hi rpd it is were the buyers and sellers have switched positions now if you a purist SD these zones will not make sense lets see if I can put it into a chart or set of charts to better explain

when price fell through the consolidation a engulfing bar formed - there was no more buyers at this level - price falls - this first line becomes resist the top of the engulfer becomes top of resist. So we are going to draw our supply here. We expect price to stay below this however it crosses above - therefore as you look along the chart you can see where we had sellers at that level we now have buyers - a swap area

every leg up or down has built a base and it is the base that needs to hold price - this is a failed base - price falls through

now when you look at the swap area keep in mind that each time price has gone to this level it has gone further into it

now at the bottom of that leg we have a repeat process of the very first chart - we have a set up for price to move away from that red supply zone instead we carve above it

so as you can see we have created another swap area where the sellers should be turned to buyers when price comes back down - in saying that we are counting on buyers being at this level - there are no guarantees and price very well may fall straight through this level

This is the Yen on a 4min tf at NY open - the question is do we have buyers below

kate25

Hi Kate25, Thanks for your explanation

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