EURJPY: First red day, new monthly cycle!Hello everyone and welcome back to my channel! As always, my analysis are not a financial suggestion, neither a way to predict the market direction.
Predicting and guessing is quite 50/50, my job is hunting the best trade setup for the day, and my analysis are only a tool to identify a great risk reward and to align the setup with the overall thesis.
EURJPY, ended the month of May with an interesting signal, and I'm looking to potentially complete a two week Pump and dump, if it will setup correctly during the upcoming days.
Let's see it in depth, zooming into the previous week!
Monday, opening range of the week, the weekly boundaries are in place, long triggered in the market, starting the day with a pump before Asia session.
Tuesday, initial balance, the market pumped stronger higher, expanding the range, setting the currently weekly high low.
Long traders have been triggered for the second time, and the market closed in breakout. (Other time frames may be driving this move!)
Wednesday, midpoint range of the week, nothing really happened, the market stayed inside, up high into the weekly high, closing the day as an "inside" signal, which typically can be an interesting signal for explosive move.
Thursday, the weekly high has been broken for the third time, long traders are triggered one more time, and eventually (we don't know it certainly), volume can be trapped up high, and the market could shift soon. The breakout of the weekly high, looks like failed and we might start watching for a great reversal.
Friday, last trading day of the week and the month of May, placed a lower low (breaking in structure) and pumped back up inside the daily range, near the Thursday closing price, closing the week as a first red day.
FIRST RED DAY, typical is a reversal signal when it setup properly, but as per my experience and backtest, I don't have many templates where the market fall on Monday. It might happen because it is the first day of the new month and we can see interesting moves, but currently I do not see the setup for today, unless major red news on schedule at 10am NYT might be particularly volatile.
What am I looking for?
In order to validate this signal, I want to partecipate in a pump and dump scenario, setting up during the 3 session Asia, London and NY, not necessarily today, but until the signal will be valid.
Can this market go higher?
Absolutely yes, I repeat, I'm not Nostradamus ahah I do not use technical analysis to forecast, but only to research for the risk reward eventually I will position myself in the market.
I will update this post until FRD signal will be valid!
Gianni
