The move in Euro since CPI release yesterday summed up why I thought it should drop.
RSI in no agreement with the price and now, has broken the supporting TL that it been maintaining in the recent correction.
Possibilities come up for a drop till the lower end of the channel or the Ichimoku cloud top. However, it could all come down to timing for trading this pair.
Not good signs on Draghi day!! Time to be cautious unless some knee jerk reaction happens!!
A look at the H4 chart for this pair.
I had scribbled about 1205 being a possibility, so this target has been reached.
But the candle off the upper TL of the rising channel doesn’t ease matters. 1205 seems to be the defining point for now. If it can’t stick it’s neck higher and stay above this level, some key downside targets would come into play - 1190, 1174.
So the possibility# 1 from my previous post took shape and both price and RSI have broken above their respective wedges.
But for now, the price is stuck between 2 Fib levels, 114.533 - 23.6% retracement of the rise from 101 levels and 114.880 - 38% retracement of the drop from 118.60 levels.
So I’ll be monitoring price action in this range for now. Though looking at the ranges, and also the Fibs on the rise from 112.60/70 to 114.80, 113.90-114.30 could act as a floor for now if price retraces a bit from its holy smoke 200+ pips rise.
Price reached 115.60, that I had mentioned in a previous post, thus allowing me to close my long position from 115 levels.
This was kinda timely as I wanted to have them closed before January 20.
Haven’t looked at current chart. No fresh positions for this pair in radar as I’m travelling at the moment and would be in trade-light mode till Tuesday next week.
Dayyaaammnn!!
I told myself to not look at the charts but just couldn’t keep my eyes away :13:
A possible inverted HnS could be in play for USDJPY on H4. and if it plays out, 113.70-114.05 is the area to look for the drop before a parade to 116.80. If I remember correctly, that was where’s it sold off in last week or so.
Some brief notes.
Have got a long USDJPY at 113.868 and a short XAUUSD position at 1215.92 taken. Quick look at the charts got the dollar to drop as scribbled before, getting to my entry point.
Not able to post charts from phone now, but would see if I can when am back at my terminal.
Back home, back at my terminal, back to some work!!
Not the most greenish of welcome back on my positions though
Some more notes here on my positions taken yesterday.
[ol]
[li][B]Buy USDJPY[/B]
[/li]The price dropped from 115.30 levels following the inverted HnS pattern I was expecting. Though if one looks at H4, there were more clues to this drop as well - notably a potential HnS on RSI at exactly the same price point, the upper TL of the falling channel the price has been comfy in this month and the Ichimoku cloud bottom level had been reached as well.
So sellers had a field day.
I had entered a long position at 113.80 levels anticipating rebound at the right shoulder on the inverted HnS. Price continued to drop further though with a break of 113.50 and now I note on the charts that the HnS on RSI hadn’t played out completely when the price was at 113.70-80. So this pattern played out eventually with the price dropping to as low as 113.20. I had entered another long position at 113.35 levels with a concurrent green candle on H4 in line with the uptick in RSI after completion of HnS.
This was targeted as an intraday trade for the rebound + retracement.
For now, I’m expecting a bullish divergence on the H4 RSI, so continuing with my long positions and might enter more if more supporting clues are visible on the chart.
[li][B]Sell XAUUSD[/B]
[/li]Though this was an add-on trade to take advantage from a rise in dollar yen, there is a bit of catch on this one on the H4 charts. RSI isn’t nodding its head to the price movement in entirety. Similar to what I see on EURUSD. So I doubt if these pairs have enough horsepower under their hood for the kind of ride they’re attempting.
Am cautious on any upside for now, as it could easily be a topping process happening at 1205-1220 levels. Let’s not forget that it has done an almost 100 km trip from the lows in December 2016, so you never know when it decides to pit-stop.
[li][B]Sell GBPJPY[/B]
[/li]This was taken as insurance for the short yen position taken at 115.80 levels. Contained between 2 descending TL’s for now on H4 and indicators don’t look any encouraging either.
[/ol]
Have locked my existing short GBPJPY trade with a long position, before Brexit related news had to come out today.
Gonna let this piplock roll now, till the dust settles down as Trump’s meeting with May later this week could be a potboiler for the Pound too.
Meanwhile, yen been weakening in Europe, so that was another reason to lock in with a long position.
H4 chart here.
Trendlines mention in previous post still contain price, net would be keeping an eye on daily close for today.
XAUUSD price got rejected at 1218-1220 yet again. Clues explained before continue to hold. And this time got added with a bearish pin bar, bearish divergence on stoch and a bearish crossover on MACD.
Another note is that it is below the 5 DMA now. I think this could be a key point now 1209-1210. It seems to have just lost inherent strength altogether and probably is now at the mercy of dollar’s movement. Bulls don’t seem to be interested here till it clears the 1222 level, where the Daily R2 has been hovering around for sometime.
1205-1220 was the zone I was looking at where a topping process could be formulating and the price managed to hold itself inside it yesterday. There’s a supporting TL from 1150 too here, that has been supporting price since 02-03 Jan.
So this zone is becoming a range now and could also possibly make the pair directionless for a few days, of course unless a break-out happens either way.
Have come out of this piplock arrangement by closing the long position opened yesterday. Short position continues.
Some observations on the daily chart leading to this decision.
Daily chart here.
I looked up the price level where the retracement post the major Brexit fall got rejected. It got broken earlier this month. Plus the daily candle failed to close above it yesterday and may end up creating a bearish pin bar today. Only time will tell.
A lone holiday for Australia in the middle of a trade week and a truncated week of sorts for me!!
A quick catch-up on what’s been happening on my trading desk. Not posting separate posts now as am lagging behind on time for the journal vis-a-vis trade calls taken in the last 2 days.
[B]USDJPY[/B]
Closed my long dollar positions too early, in hindsight. Everyone is talking about the double bottom, but am skeptic of dollar running away to 118-120 from here. Big data releases today with US GDP scheduled. Am positioning myself with buying yen, some of the macro news wires doesn’t seem to be in sync with an outright dollar upside move. Momentum and bids have come in higher TF’s, notably H4 where the RSI bullish divergence I had talked about played out well; so all traders who have held on to their long positions from 112.70 hit a nice jackpot!!
[B]GBPJPY[/B]
Same case as buying yen here.
[B]DAX30[/B]
Positions in progress here are in loss right now. But too much euphoria out here due to America’s 20k dream!! Lot of ground to cover for a drop till its trendlines on higher TF’s.
[B]XAUUSD[/B]
Profited from the drop as per my targets, but now I’ll be slowly nibbling into this pair.
This idea moved one well, with the price giving a nice move to high 1190’s before waiting for a thought.
Chart conditions still continue to be favorable on H4, however caution is to be exercised due to BOJ event risk today.
So it is likely today that price of this pair might looks for direction based on how dollar moves, and how much of a follow-on risk-off sentiments trickles into the Asian session this morning.
