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USD/JPY: Three Scenarios and How To Trade Them 📊The chart for today is the USD/JPY! Since the start of the week, the USD/JPY has moved over 100 pips in a pretty rapid sell-off without making any major pullbacks. When I see such a thing I am always curious of how the volumes got distributed in such a trend. What I am interested in the most is significant volume areas created within the trend. I call them the Volume Clusters. Volume Profile analysis In this case, I used my Flexible Volume Profile tool to look into the volume distribution in the newly formed downtrend on USD/JPY. I discovered a really significant place, where massive volumes got traded. This Volume Cluster was formed around 106.00. I think that the sellers who are currently pushing the price downwards were adding to their short positions there (around 106.00). Two scenarios likely to happen What will happen when the price hits this 106.00 area again? There are 2 scenarios that I think will most likely happen. 1. Sellers who were adding to their short positions around 106.00 will start being active again and they will start an aggressive selling. This will result in a reaction to this level and the price will go downwards from there again (the level will work as a resistance). 2. Buyers who push the price upwards – back towards the 106.00 will want to quit their longs somewhere around this area. Why? Because they know that this is a heavy volume area and that there could be strong sellers defending it. If there isn’t a major change of the sentiment on USD/JPY, then those buyers won’t want to risk a fight with those sellers. It is safer for them to just bank their profits and quit their trades. What does a buyer need to do to quit his trade? He needs to sell – place a short trade order. Those short trade orders will help the price move downwards from the 106.00 resistance again. When the price reaches the 106.00 area, then it is likely that a combination of those two scenarios will occur. We can’t tell which scenario will play a stronger role but the important thing is that the result of both of them is the price reacting to 106.00 resistance. I was talking about those scenarios and the logic behind them some more in this Volume Profile Webinar. A third scenario I would be mad if I wouldn’t also mention another (not so likely) scenario. In this scenario, the price simply shoots past the resistance, totally ignoring it. This third scenario is most likely to happen if there is a change of sentiment in the market. This would mean that buyers are not afraid of the sellers who are defending the 106.00 area. The reason would be that he buyers have a strong belief (maybe some new, crucial information) that the price should be much higher than it is now. If the price shoots past the resistance, it is best to go with the flow and take a Reversal trade which should help you to save the day. Reversal trade A Reversal trade is a trade in an opposite direction after you got stopped out. You always take the Reversal trade from the same trading level as the previous trade. This means: If you take a short from 106.00 and get stopped out, then you wait for a pullback and then go long from 106.00). Reversal trades are based on the logic, that a breached resistance becomes a support (and vice versa). Here is an example of my trade from yesterday: There was a volume-based resistance on AUD/USD. The price did not react to it and it got breached. I took a Stop Loss there. Then, when the price moved back to the breached resistance, I entered a Reversal trade (a Long trade). This one ended up as a winner and helped to cover the loss from the previous trade (click to enlarge): I hope you guys liked today’s article! Let me know what you think in the comments below! Happy trading! -Dale
Editors' picks
by Trader_Dale
18
USDCAD Flirting with a key support levelAfter almost 6 months of decline, we may see USD/CAD establish it's support level around the 1.3200 level. Looking at the weekly timeframe, the price is currently at the confluence of multiple support level. A break below this level would mean a very bearish sign of the currency pair and would expose the 1.3000 level or much lower. On the daily timeframe, there is also a possibility that it will form a double bottom (bullish reversal) pattern. If today's session close with a bullish rejection candlestick that would be the first sign to watch for a possible reversal. Bullish divergence is also forming. Key resistance will come at 1.3400. A break above this level will most likely tell a reversal in trend is coming.
by TheActveTrader
GBPUSD - More downside? GBPUSD - What clean moves we have had. When it comes to trading and you don't understand what's going on go through higher time frames and concentrate on the levels and then go through more in depth technical approach the shorter the time frames you go into or having few bad runs - take a day or two off and come back refreshed. I've been selling this pair since 1.31200 areas. Now is a key area to be looking at - Why? Let me explain further...! Technical terms: We have a bear flag forming - it's having a pull back as this current time - But question yourself for me if this pull back goes extending further towards lower ends of 1.31010 areas. Could be a fake break out! I will be thinking perhaps bulls are back in control and will be looking at the price action to keep an eye on. However, if this pull back validates and we have further weakness bears are still in control under 1.30150 area. You could measure the bear flag which reach towards areas of: 1.29558. You could even put: EMA's, Fib Retracement, or Elliott wave. Either direction - With my analysis, I keep a non-bias approach. Keep in mind - The beautiful pull back we had in precious metals, 10 yr/5 yr T notes and DXY. Just a trade idea, not a recommendation. All the best, Trade Journal.
by Trade_Journal
NZDUSD - Kiwi...Today's set up!Worked out well yesterday, what will today bring us? Just a quick take today - as it's Friday!! We are still following the same technicals as yesterday, we had the bullish momentum towards upside. Out of channel the bears are in further control, the next trend-line could be a possible target. Still within channel, bullish momentum continues, and allows us to the next resistance area within the channel! Fundamentals: Today NFP - Keep an eye on SPX & Dollar pegged pairs. Enjoy! Remember: Just an idea, not a recommendation.
by Trade_Journal
KIWI - NZD/USD - Looking clean...!Kiwi, it's been tricky to trade for sure! Let's see what we can get out of Kiwi....! Technical aspect: - A break to either direction - - Could be put as a bear flag - Channel going up until broken to down side then could confirm to be a - Bear flag - Remember Confirmation is key! Bulls are in control as long as it's above: 0.66580 Bears come into control as long it's below: 0.66350 A break to either direction is great - remember fundamentals - Unemployment figures and NFP out of US. Key Tip - Don't get emotional towards your trades! Remember: Just an idea, not a recommendation!
by Trade_Journal
AUD/USD - Is it time to sell?I took a fade trade on the majors yesterday, dollar rising- worked out great but you got to remember and think - Is it time to sell again? AUD/USD, Keep in mind it is a commodity currency pair. Until it's not passed below the yellow small bullish channel we have going, the bulls are in control - Areas to keep an eye on are: 0.71800 /0.71900 then it could be an area to fade for quick scalp trade or whatever you have on your trade plan for further confirmation. Until then, you could scale into the trade and little reminder - we have to wait for the right price action of direction. For those who would like to go in depth: You could go into analysing and take a look at fundamental aspects as well as comparing the pair to being part of basket of currency commodity pairs. Remember: Just an idea, not a recommendation. Have a great week ahead.
by Trade_Journal
XRP-BTC Weekly Looks Bullish!We may have broken a downtrend that has been holding up as resistance since May 2019. It can be very possible XRP bottomed out in late June and is up about 25% since then. Historically, XRP has been known to run hard in short amounts of time. We are also in an alt cycle that is being led by ETH and all the majors are following! Is it time for the majors to catch up with the DeFi pumps? If the majors pump like everything else we can hope for multiple x gains. Targets are 3350 and 5770 sats.
Long
by dmen626
EUR/USD: Volume Profile 📊 & Price Action 📉 Analysis In my yesterday’s analysis, I talked about combining Volume Profile (the Trend Setup) with Price Action (Support→Resistance Setup) to create a powerful two setup combo. Today, I will show you a very similar example, because practice makes perfect. This one is on my favorite trading instrument EUR/USD. Volume Accumulation Setup There was a very nice and tight price rotation yesterday. From that rotation, a strong buying activity started. This buying activity resulted in an aggressive 100 pip movement. This strong up move indicates that there was some serious buying going on inside that rotation. Buyers were entering long positions there slowly and without being noticed. After they had entered their longs, they started pushing the price upwards – which snowballed and resulted in a strong uptrend. For me, the most important thing here is to know, where the buyers entered most of their longs. I used my Flexible Volume Profile to look inside that rotation area. As you can see from the picture below, the heaviest volumes got accumulated at 1.1443. When the price reaches this area again at some point in the future, I expect that the buyers from this area will become active again and that they will push the price upwards from there again. This is why I think the 1.1443 will work as strong support. Price Action Apart from the volume-based setup, there is also the same setup I talked about in my yesterday’s article – the Resistance → Support setup (CLICK TO LEARN MORE) As you can see from the picture below, the price reacted very nicely tho this 1.1443 area in the past. There were several reactions and every time the price bounced off this level. It worked as a strong resistance. Now, when this resistance got breached, it became a support. This is an old Price Action setup, and one of the few I like to use. I rarely trade it as a standalone setup but I really like to trade it when it is in confluence with Volume Profile, like in this case. I hope you guys liked today’s analysis. Let me know what you think in the comments below! Happy trading, -Dale
by Trader_Dale
1
AUD/JPY Volume Profile & Price Action Setup Combo 💡In today’s trade analysis, I would like to show you my most favorite combination of two trading setups. It is a combination of a Volume Profile setup and Price Action setup. Let me first talk about the volume-based setup. Trend setup (Volume Profile setup) The AUD/JPY went into a strong buying activity yesterday and the price continued to move upwards since then. When there is an uptrend like this, then what interests me the most is how the volumes were distributed inside that uptrend. The easiest way how to find out is to use my Flexible Volume Profile tool and move it over the whole uptrend area. In this case, my Volume Profile revealed a significant volume cluster around the middle of the uptrend. It is pretty likely that buyers who drove the price upwards were adding to their long positions there. It is a significant zone for them because it is the entry point of a lot of their positions. For this reason, if the price makes it back into this area again, those buyers will want to defend their long positions. They will do that by placing aggressive long Market orders and they will try to push the price upwards again. That’s why I think this area (75.28) is likely to work as a strong day trading support zone. Resistance → Support (Price Action Setup) The second piece to my favorite setup combo is a Price Action setup which says, that a breached resistance becomes a new support. As you can see in the chart below, the AUD/JPY already reacted to the 75.28 zone in the past. This level worked as a strong resistance. Then, when the price went through this level today, the resistance became a support. Want to learn more? As you can see, there are two trading setups which both confirm the strong support around 75.28 area. The first setup is called the Trend Setup and it is based on volumes, and the second setup is called Resistance→Support setup and it is based on Price Action. You can learn more about both those setups in my FREE Volume Profile book which you can download by clicking the banner below. Happy trading! -Dale
by Trader_Dale
1
CHF/JPY – Volume Profile analysisIn my latest market analysis, I talked about an intraday resistance on CHF/JPY. There was a nice reaction to it on Friday. First, there was a quick +16 pip reaction, and then on the market open, the reaction continued and made +26 pips. Still, it is always safest to close all your intraday positions before the weekend. There could be an opening gap which could cause your account a lot of harm if the market went the wrong way. So, in this case, it would be just best to close your position in green numbers before the market closed. CHF/JPY – Volume Profile analysis In today’s analysis, I will also comment on the CHF/JPY as there is another nice trading opportunity. What I want to talk about is a newly formed support around 113.45. On Friday, there was a rotation formed around the 113.45 area. If you use Volume Profile you can see that there were heavy volumes traded there, and most of them at 113.45. From this place, a strong buying activity started. This means that there were buyers entering their long positions in that rotation. Then those buyers started aggressive buying and with Market orders pushed the price into a new uptrend. When the price returns back to this area again in the future, then it is pretty likely that those buyers will become active again and they will try to push the price upwards from this support again. Happy trading, -Dale
by Trader_Dale
4
NZDUSD- Long Opportunity on the bounce of the Trend line!-Very good buy setup on the bounce of the ascending trend line. -Looking for price to potentially hit TP levels of: 0.65018, 0.65688 and 0.66209. -A confluence which suggests that price has a higher probability to move to the upside is that the supply zone is in line with 23.6% fib level. This means that price could react around the 23.6% zone well which gives me confidence that bulls will take control of this pair. -Another confluence is the 50EMA is below price which shows that this pair is in a bullish trend and should look for long opportunities only. -Looking for a breakout the supply zone and retrace back to the zone to enter a long position. -Wait for a strong bullish confirmation to enter a buy on this pair. Let's see what happens during the week! Make sure to follow, like and comment your ideas/opinions on this pair.
Long
by LDForex_
EUR/USD - Possible Head and shoulders formation.Hey, I am back after weekend with another trade idea, this time looking at the main pair, EUR/USD. It seems like EU can print us a pretty Head and shoulders formation, I will try to be one step early, and try to short this pair at the resistance area. This is a trade against the trend so it's kinda risky, but the Head and shoulders formation is a trend changing formation so let's see! Don't forget to follow me, to not miss out on a good trade opportunities😉 Each Like is very much appreciated! 🙌 If you have any questions, feel free to ask.
Short
by TiborVrbovsky
2