Euro / Japanese YenShort
EUR/JPY October Market Outlook: Bearish Setup with Key Sell Sign
EUR/JPY October Market Structure and Trading Insights
The monthly structure for EUR/JPY in October shows an open high-low-close pattern, which is indicative of a potential sell setup. However, we are currently waiting for confirmation in the form of a TDI (Traders Dynamic Index) cross, which will signal when to enter sell positions.
Key Points to Note:
1. Bearish Divergence: From August 16, 2024, through the current market high, we observe a clear bearish divergence. This is often a precursor to downward movement and strengthens the case for a sell setup.
2.Daily Timeframe Open High Structure: The daily chart for October reflects an open-high structure, reinforcing the bearish outlook for the month.
3. Overbought Market Conditions: Since the bullish breakout on October 1, 2024, the price has been in an overbought zone. This suggests that a reversal is likely as the market corrects from these elevated levels.
4. Double Top ('M') Pattern: There is a visible double top pattern, also known as an 'M' pattern, on the daily chart. The second leg of this 'M' pattern looks particularly strong, further signaling a potential bearish move.
5. TDI Cross as Confirmation: A bearish TDI cross will serve as a confirmation of the presence of sellers. This signal is essential to validate the entry for sell trades.
Take Profit Levels:
- Take Profit 1: 161.600
- Take Profit 2: 160.500
Trading Advice:
It is important to exercise patience and wait for valid confirmation signals, such as the TDI cross, before entering any trades. Always approach the market with caution, utilizing sound risk management strategies to safeguard your capital.
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