Chart pattern and price action


Note, Trading is risky, my posts are commentary.
This is USDJPY, the first image shows a consolidating rectangle, which indicates going SHORT, if the resistant level would hold, or a break out.
while the second image shows where i used the fibonacci to place my stop-loss at the red arrow which for both uptrend and downtrend, the 61.8% and 38.2% looks firm… what do you think guys?

Use an entry order to take advantave of a potential b/o then subsequent retest w/o a violation of the major s/r level in play. The entry should be triggered by the retest not the initial b/o btw. Just my 2 cents

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To my mind, it looks like a long setup. Just think about it in the terms of price dynamics: there is a strong downtrend which ends with several large green candles showing the increasing activity of buyers. The price fails to move lower and returns back to higher level and starts consolidation in the upper range while the trendline of the downtrend is already broken. It al looks like a mid-reversal of a local downtrend, so as for me, it would be interesting to look for an opportunity for a swing/mid-term trade with long positions. For example, we can get into the position just now (at the moment when this screenshot is taken) and place the stop below the lowest point of the consolidations. By the way, the best way to place stop in this situation would be to split it into two parts: one would be below the lowest point of the consolidation while the second one should be placed below the lowest point of that previous downtrend setup.The first price target is 1x distance from th entry point to the lowest point of the trend, and the second target is somewhere in the beginning of the downtrend or a bit higher.

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Ok, Andre. You made a valid point. Though for now the resistant line is holding very well, as it is a really strong level. And though the trend might have changed direction, but observe the schostatic oscillator at over bought region and made a sign of crossover, the MACD’s uptrend momentum is a low one, all signs of downtrend in place, as to your idea on going long, won’t pending orders be alright to do what you’re suggesting, than sit and wait?

I think its too many mixed signals to trust a direction reversal or downtrend confirmation…