Unfortunately, we didn’t see a break of the neckline NOR a test of the 100.00 handle! Price stopped short of testing the major area of interest, as it reversed at around 100.17 before zooming back up late in the week thanks to yen weakness! So much for that!
As it is, it seems that price action is now forming a symmetrical triangle and is currently testing the falling resistance trend line.
To be honest though, I’m not quite sure if I’d want to put on a short position right now. EUR/JPY has closed higher four days in a row now and there doesn’t appear to be anything on the horizon to suggest it will reverse course. That said, I’m gonna chill on the sidelines first and look for other setups to develop before putting up any trades.
Thanks for following me and good luck trading over the rest of the week! If you have any trading setups in mind, hit me up on Facebook, Twitter, or Google+!
Trade idea: 2012-10-11 03:35
I spy with my one big eye – a double top on EUR/JPY! Have a look at this baby:
It’s a classic double top pattern with its neckline right on the 100.00 major psychological handle! Ain’t she a beauty?
Now, I have to be honest with you guys – I’m not exactly sure how I wanna play this trade just yet.
On one hand, I’m tempted to go long around 100.00, since this was once a solid support zone.But on the other hand, the double top and lower highs make me think that this pair might just continue falling… and I don’t want to catch a falling knife! Besides, sentiment seems to be favoring euro bears at the moment, as the prospect of a Spain bailout continues to loom over the markets.
So for now, I’m on a wait-and-see mode. I’ll probably go long if some reversal candlesticks form around the 100.00 handle. However, if the pair manages to break cleanly through the neckline, I’ll get ready to sell this sucker.
Of course, I’d have a much easier time making a decision if Stochastic gave me confirmation, so I’ll be watching out for signs of overbuying/overselling and divergences as well.
What do you guys think? Do you favor a bounce or a break? Hit me up with some comments below and let’s get a discussion going, homies!
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.