AUDJPY Sell OpportunityPrice Action Analysis:
The bullish pitchfork (marked in green) failed to reach its median line, leading to a breakout below the lower parallel. This breakout signaled a shift in market sentiment, potentially indicating a bearish reversal.
Drawing Conclusions:
In response to the breakout, a bearish pitchfork (marked in pink) was drawn to assess the potential downward trajectory of the pair. What followed was a test of the intersection of these two pitchforks, a critical zone that often serves as a pivot point for price movements. The price action confirmed the significance of this area as the pair swiftly started its descent, breaching multiple lows within a single bar.
Trade Setup:
Based on this analysis, a sell opportunity arises at the upper parallel of the pink pitchfork. This level offers an attractive risk-to-reward ratio of 1:3 Placing a sell limit entry at this point provides an opportunity to enter the market if the price retraces to the predetermined level.
Risk Management:
To safeguard against potential losses, a stop-loss order should be placed at 94.472.
Profit Target:
In pursuit of the desired risk-reward ratio, the profit target is set at 92.814. This level aligns with the lower parallel of the bearish pitchfork.
Note:
Remember that while technical analysis can provide valuable insights, the Forex market is inherently volatile. It's essential to stay updated on market news and developments that could impact your trade, and to continually refine your strategies based on real-time observations.
Happy trading!
