EUR/JPY
Daily time frame
After continuous increase without retracement the pair reached on its own to the next resistance Fibonacci – integration of 50% retracement from the big decrease and 161.8 % Fibonacci of the range 122.00-121.80 (green area). This is the last strategic area for downward retracement prior to the arrival to the full target of the range – 125 (purple area).
As can be seen by the graph bellow:
4 hour time frame
Since the momentum is still high one must wait for the creation of the double top pattern or the breakdown of the increasing price structure which exceeds the integration of the short position in order to take a part of the downward technical retracement, one can also wait for the breakdown of the discontinuous red line in the RSI indicator.
As can be seen by the graph bellow:
Potential Trade
Short in the breakdown of the discontinuous red line in the RSI indicator or in the breakdown of the upward price structure (double top pattern or the creation of downtrend structure). Target: since the pattern does not yet exist, the first target is 300 pips – the retracement depth 38.2 % Fibonacci of the last current upward movement (the movement is highlighted as a discontinues pink line).
Stop: beyond the high of the pattern.
AUD/JPY
Time: 08:00 Rate: 88.40
Strategy: short
Daily time frame
The pair did not activate the short trigger and is found in a sequence of 14 candlesticks without one red candlestick, something that is clearly outside of the statistics, therefore it is still waiting for a major downward retracement despite the rising momentum.
In the first stage, the retracement down is at least expected at 300 pips – the depth of the retracement is 23.6% Fibonacci currently true, in the second stage the depth of the retracement is 38.2% Fibonacci, about 530 pips.
As can be seen by the graph bellow:
4 hour time frame
The pair gets closer to the following resistance level 90.70-89.80 (red area), the area is a good point for the momentum stop and the downward retracement.
From this point the stop pattern should be searched (double top pattern) and to take the short in its breakdown. If the pattern creates an arrival to the breakdown area, the stop should be placed above.
As can be seen by the graph bellow:
Potential trade
Short in the breakdown of the upward price structure in the 4 hour time frame
Stop over the pattern or above the stop area (whichever is higher)
First target: about 300 pips (23.6% Fibonacci of the upward movement)
Second target: about 530 pips (38.2% Fibonacci of the upward movement)
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