USD/JPY Trading Scenario Buy vs Sell 17-10-2016
1-Resistance at 2 will hold and the price will bounce
Why ?
- Price formed lower high (double top) which is a sign that the uptrend is losing momentum
- Bearish divergence between price and stochastic
- The resistance was tested before and price failed to break it
- Weak candle printed on the resistance and close inside the zone (reversal signal )
- Large bullish candle printed away from the zone (confirmation of reversal)
Confirmations
- Market print another bearish candle and close below the uptrend line
- No reversal candle printed on the uptrend line
- Stochastic lines cross , cross overbought zone heading to oversold
- Technical system not strong buy
- Low time frames technical system strong sell
- Low time frames give trend reversal signal
2- Price break resistance at 2 heading to 1 and up trend continues
Why ?
- Price tested the uptrend line and push away from it
- Ascending triangle chart pattern formed which can break either ways
- Price now is testing the resistance at 2
- Price heading toward the zone with high momentum
Confirmations
- Candle close above the resistance at 2 and another candle opens at-above its close
- Large bullish candle printed
- No reversal candle on the resistance line
- Stochastic stay in the overbought zone
- Technical system gives strong buy
- Lower time frame confirmations
-Technical system strong buy
-Stochastic is trending up
-Price retest the zone