Short

Updated

GBP / JPY - Rising wedge in downtrend - continuation - SHORT

This can only be played out once volume enters the market, target is 147.5 where the "point of control" was previously established. We have divergence on the daily chart, with weak volumes on other time frames, so not the best confirmation, but what the hell, I'm already in this trade from a few days ago. Intra day trade only.

Trade active

18/05/2018 - @149.862

Note

We've broken out of the wedge and into profit, on the daily time frame a FLAG has formed, huge continuation of the trend, if it breaks out.....

Note

On market open, we have the Japan Trade Balance numbers. Historically, it's rare for the market to fall during the Asia session after the Trade Balance, do not be surprised to wake up and find a rise to 150.2, the only time the market has been bearish in the Asia session, was when a surplus was forecast and it was 25% less than forecast, so not priced in.

But, there is some good news to my caution, 7 / 10 times, on European and UK market open, they've become immediately Bearish and the Bullish response and they sold it much lower than market open, 1000 pips lower. This is what we want to see. last month was the largest surplus ever, biggest fall on UK open.

Note

I have 3 short positions on this trade, all nicely profitable, but unless we see some significant bearish movement on Monday, I would be very nervous taking this lower, it's not been an easy ride.

So my focus is on the first target of the FIB level at 148.527, after that, 148.25 and I will leave some profit to run, unless we're seeing a rather viciously see-saw market again, which I would not be surprised about.

Note

Small move on initial open, as expected since we have JPN trade balance this evening, we'll really know after 9am UK time Monday morning.

Note

Now, we have a lovely profit sitting on this pair, we've had a nice move down to 149.1, we've tested it twice and now we're stuck in this range.

Due to the Yen weakness, I'm very wary of where it's going next. But let's trade what we see. We have declining volumes, BUT on lower time frames the RSI is rising, large time frames, let's be patient a little longer.

Note

We're back inside the range now and nicely profitable if you took a position up at 150 or before, we have a nice rejection candle right in the middle, we'll now wait for the bears and bulls to fight it out... Looking at the declining volume RSI below 50and we're below the point of control at 149.379, I say the bears are going to win, all be it, at a snails pace, profit is profit, slow or fast, remember we have some seriously large red reports for the UK, including inflation on Monday, so expect sterling declines before then as traders unwind their positions for saftey, well some of them anyway.

Note

We're retesting the low of the range, we're in a previous support area, but the highest point of control, that is below us in red, it's going to be a hard slog going down with such a weak Yen

Note

UK 100 (FTSE) just traded at an all-time high, with no sign of stopping yet, this is fuelled by the low sterling and will only push the currency lower. Patience!

Note

It's been a pretty slow ride with this pair, but we're slowly moving down. too slow for me, and therefore I'm looking to profit at 148.3 - 148, ideally tonight as I feel our profits will be eroded overnight.

Note

Sadly I was asleep when we hit 148.8 and look at the reaction off that support line, it's the weaker of the two long-term trend lines, the second being the pink link in the green below, our target. In anticipation of today's numbers, we've shot back up to the range, but not beyond, the forecast is positive, in which case, this pair will go to 150, if not, we're going to 147 by tomorrow morning before CPI, we may do anyway. Tough call on this pair today, bit 50/50.

Note

We're either in a short-term symmetrical triangle, in which case, volume dictates we shall break down shortly, a or longer-term rising wedge, which if the CPI numbers match for an uptrend, would happen tomorrow morning.

Note

Price is falling out of the range and we're sitting @149 the point of control, if we break through that towards the edge of the triangle, the bulls will respond, I may take profits at this point if the bulls are overzealous to get us back to the highs of the triangle.

Note

Finally we've broken down to test the edge of the triangle, I'm expecting this to give way and test 148.2, the long term trend line, the bulls will be waiting and profits will be taken.

Trade closed: target reached

We have arrived at 147.5 the edge of the long-term channel, and in 90 minutes we have the UK CPI, either way, this is a serious market mover and many traders will want to exit or lighten their positions before this opens. I suggest you take profits now, maybe let a small profit run, if you joined above @150 or above.

Trade closed: target reached

147 hit, I've taken 90% profits, this was a big one.

Note

And the CPI 0.4% this is a negative reading which will take our additional profits further down, new target, @140. Nothing to lose on this trade.

Note

We hit 146, can we go lower.... pullback, short again

Trade closed: target reached

Final target reached @145, for a longer term view, check out below

GBP / JPY - quick pullback to 147 then Long to 152

Note

This pair is now working it's way back up to the long-term rising channel, it will be under a great deal of resistance, but the Yen is weak, I forecast it would be on it's way to 152.

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