Anticipating a Pullback Before Continuation
Overview:
USD/JPY has been on a tear, but it’s looking a bit overextended. I’m watching for a potential pullback to around 145.80, where we have some Fair Value Gaps waiting to be filled. This dip could be the perfect setup for a fresh long entry.
Why a Pullback?
- Minor Pullback: We’ve seen a small retrace, but it might not be enough. The market often needs a deeper correction after a strong run-up.
- Bearish Divergence: The RSI is flashing a warning—momentum is cooling off. This divergence often signals a correction is due.
- FVGs Below: There’s a couple of gaps down near 145.80 that price might want to revisit. These gaps often act like magnets in a trending market.
The Plan:
- Short-Term Short: If the price starts dipping, I’m targeting those FVGs around 145.80. I’d place a stop just above the recent high (around 146.30) to keep things tight.
- Long on the Dip: Once we hit those gaps, I’ll be looking for signs of a bounce to jump back in long, aiming for the next leg up.
Markets are unpredictable use stops and manage your risk. This isn’t a guarantee, just one possible play based on the current setup.
USD/JPY has been on a tear, but it’s looking a bit overextended. I’m watching for a potential pullback to around 145.80, where we have some Fair Value Gaps waiting to be filled. This dip could be the perfect setup for a fresh long entry.
Why a Pullback?
- Minor Pullback: We’ve seen a small retrace, but it might not be enough. The market often needs a deeper correction after a strong run-up.
- Bearish Divergence: The RSI is flashing a warning—momentum is cooling off. This divergence often signals a correction is due.
- FVGs Below: There’s a couple of gaps down near 145.80 that price might want to revisit. These gaps often act like magnets in a trending market.
The Plan:
- Short-Term Short: If the price starts dipping, I’m targeting those FVGs around 145.80. I’d place a stop just above the recent high (around 146.30) to keep things tight.
- Long on the Dip: Once we hit those gaps, I’ll be looking for signs of a bounce to jump back in long, aiming for the next leg up.
Markets are unpredictable use stops and manage your risk. This isn’t a guarantee, just one possible play based on the current setup.
Note
Adjusted stop loss held for a good 50 pips
entered long as anticipated
Note
Bearish Divergence on the 1h and the 10min
looking at the dxy seems to have failed to create higher high
looking to short for a nice pullback to the previous day high
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