Hey guys, it’s been awhile since I’ve done an idea on Forex and wanted to show you guys this one.
It looks like we have a nice short setup for GBPJPY.
On the chart we see the price has retested a long-term trendline that has kept price up as support since April 2017.
The trendline was broken just a couple weeks ago and this trend line is now acting as resistance with the price unable to push back above.
Additionally, the falling trend line in blue is also acting as resistance.
We can also see the price has found resistance at the 0.5 fib level. I plotted the Fibonacci retracement down towards 139.375 where the big head&shoulders formation began.
Finally, we are seeing a bearish crossover with the 50MA crossing under the 200MA, signaling further downside.
I have already entered a short on this trade, and I am putting my stop loss just above the resistance trend line in black, and above the blue trend line too.
My first target is at the 0.618 fib level (145.891) where I will take some profits.
Please like if you found this useful! :)
It looks like we have a nice short setup for GBPJPY.
On the chart we see the price has retested a long-term trendline that has kept price up as support since April 2017.
The trendline was broken just a couple weeks ago and this trend line is now acting as resistance with the price unable to push back above.
Additionally, the falling trend line in blue is also acting as resistance.
We can also see the price has found resistance at the 0.5 fib level. I plotted the Fibonacci retracement down towards 139.375 where the big head&shoulders formation began.
Finally, we are seeing a bearish crossover with the 50MA crossing under the 200MA, signaling further downside.
I have already entered a short on this trade, and I am putting my stop loss just above the resistance trend line in black, and above the blue trend line too.
My first target is at the 0.618 fib level (145.891) where I will take some profits.
Please like if you found this useful! :)
Note
Pullback continues. It looks like price has found support at the 0.618 fib. I have closed my larger position trade, but I'll let my other trade continue as long as price keeps falling. I'll be looking towards the 0.786 to take profit on that.Note
Update: Short call is still in play here. We see over the last few days the price dropped from the several resistances I noted, and then found some support at the 50MA on the 4hr Time Frame as well as right near 0.618 fib level. As long as the price stays under those resistances noted in my original call, we should expect the downside to continue. It was good to see the wick come up to that blue trend line and get rejected.
I’m also noticing an overall decrease in volume from the point the price hit the 0.786 fib and made that move upward to re-test resistances. That decrease in volume could be a sign of weakness in this rally up.
Remember to keep your stop loss above 149.00 which is above all these resistance levels!
Note
Price has still found solid resistance at the 0.5 fib, the blue trend line, and the rising black support-turned-resistance trend line. If you aren't already in this trade, now would be a good time to enter a short!Note
Moment of truth here…let’s see if price can finally break this 200MA on the hourly. If it does, this should drop pretty quick. There has been some nice spikes in selling volume, so let’s see if it follows through. Price is also still below the 200MA on the 4hr TF and there is a slowing of momentum on RSI and CMF.Note
So we got some downward movement after hitting resistance at both trend lines but still no significant spike down yet. I drew a fib retrace from 156.610 to 135.600 and found the price is finding support at the 0.5 fib level. If price can break down below this 0.5 fib, we should expect it to find the next support at the 0.618 fib level and that descending black trend line just below it. If the 0.5 fib doesn’t break however, then there’s a good chance the price is going to move back up to re-test the ascending black trend line (right around the 0.382 fib level) once more.
For now, I still have my stop loss above the ascending black trend line as I am sticking to my original plan for a longer term sell.
Note
+260 pips on this trade so far! That was the spike down I was waiting for :)Right now the price has found some support at the 0.382 fib level. This fib retrace was drawn from 156.700 to 124.863, which is the retrace of this entire bullish movement beginning October 2016 to present.
I think it’s possible to see the price break this fib to the downside, however it should find support at the blue trend line, so I’m going to play it safe and close out half of my trade and let the rest continue. I have also moved my stop loss for the remainder to 145.500 in case it breaks up and begins a bullish rally!
Trade closed: target reached
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.