First of all let me remind you of what I wrote up to the BoJ meetings just over 2 weeks ago: 'The only way that BoJ can make me trade this event is if it goes lower first. I see the high risk in a disappointing BoJ because the market is very biased.' I also mentioned that the structure for USDJPY and EURJPY wasn't impulsive so therefore I didn't favor a bullish continuation. Nevertheless I also tell you to keep an open mind, although our analysis turned out to be correct. There is a possibility of another bullish set-up not based on an impulse. Let's focus on the 1 hour time frame first: We see 7 waves lower (extension of 3). I counted this in my previous post as 1-2 (1-2-3-4-5=3). However IF we see green wave 5 projection break above the high of green wave 3 we might see a leading diagonal wave.
So what will be the plan? We can sell the bearish break once we see a bearish reversal pattern on lower time frames, because after a leading diagonal we most often see a sharp retrace. The other scenario is that this won't turn into a leading diagonal and the sell will give us a new low.
Medium term; If the leading diagonal will be confirmed we can focus on a retrace/consolidation down and look for buys once that settles. Focusing at the 4 hour time frame we see that a reversal out of the current zone might turn into an even bigger leading diagonal by means of a 3-3-3-3-3 structure. This will explain why I stated two weeks ago 'the first move doesn't look impulsive'. It still doesn't but this is only a valid reversal by means of a leading diagonal wave.
I hope this doesn't confuse you too much. However keep following me if you are interested in structure and context on how it works. Soon I'll be able to explain this by means of webinars on the website. For now just see what happens if you don't fully understand it. You will see that the scenario's that I write are either correct or will keep you out of a bad trade 90% of the time. That's trading for me and how I manage my fund, get 90% success and trade nothing less than perfect set-ups.
'So what will be the plan? We can sell the bearish break once we see a bearish reversal pattern on lower time frames, because after a leading diagonal we most often see a sharp retrace. The other scenario is that this won't turn into a leading diagonal and the sell will give us a new low.'
This happened faster than expected. Unfortunately I was busy analyzing and missed it myself. For those who shorted from the 15 min tf; well done and enjoy your profits! I call it a day and wish you all a very nice weekend!
Kommentar
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For the bears;-). Impulse-consolidation-impulse (have a look at my previous USDJPY post for additional context) This is why we write scenario's, so we can trade a move and once we are in profit can determine whether it is trend continuation of only a retrace (in case as we have two valid possibilities). But those who shorted the call you might want to consider to keep something on the table but that's up to your trade plan and trading style.
Kommentare
sonu81
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nice sir
forexstock100
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It is consolidating now . We will wait for a.b.c correction on 15 min tf then sell the continuation to 272 fib target of the last minor impulsive move which that a.b.c corrects , but the question is if we can target some far from that 272 fib from now .
TimStuyts
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I don't know what you mean by '272 fib from now'. Sorry
forexstock100
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I mean if our target is 272 fib or we should target lower level when selling " continuation after consolidation " . I am sorry for bad expressing my idea .
TimStuyts
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No problem. I would be targeting the previous low at 99.00. However I will manage the position by adjusting stop loss sooner, or take partial profit depending on how price unfolds. 127.2 or -27.2 is a popular target zone when dealing with a correction. wave C against wave A. That's not the case at the moment. But let's focus on the consolidation first and once we see that I will update again.