On this chart I see a strong downtrend that has hit a strong support level. I could look for a reversal here or a downside breakout. My preference is the latter.
Reason for downside breakout: Each time price bounces off that level, buyers enthusiasm has weakened resulting in lower highs. I also think with last weeks USD news results (which came in worse than expected) traders will be risk off.
Problem is I dont see lower wicks indicating that sellers are also not willing to push below this level.
Interesting … The 100 level represents parity, which means that the BoJ is keeping guard over it…however, given its recent failure to stem a Yen rise, can it truly stop the 100 level being broken?
My guess is that sentiment has turned already against Yen carry (long) trades, and a breakdown of Yen pairs will continue: acceleration will only come when indices will all move down significantly, e.g. S&P back below 2000 and FTSE100 back below 6000…
Personally I’d be holding off until later in the week… At the moment they’re just trending between the two support and resistance. Best thing I’d do is wait for a break out past one of them, just have to be patient! It will happen sometime soon.
I don’t usually make a trade until at LEAST Wednesday night. Monday / Tuesday I’m just watching the market and thinking of my next move.
But I ask you this, what evidence do you have to support either of your two hypotheses? Our job as traders is to find evidence of past price action that supports our current trade set-up. If the evidence is there place your trade.
But if there is not, then you trade is nothing more than a bet because I got a gut feeling…
As old mate Jake says - sometimes the best position is to have no position.
There’s strong support, but decreasing highs representing the strength of successive bounces off it. For this reason I’d be more interested, in principle, in trading a break through it than another bounce off it (which I’d sit out). So for me, it’s a potential short following a breakout (either with or without a retracement to that support before entering, to be decided later).
Who knows? No need to guess: I’d wait and see (and personally trade one but not the other).
