This Sharp Reversal on the USD JPY yesterday would have taken my Stop Loss had I traded it..
It was a tempting setup but there were some important reasons that caused this reversal and led me to avoid this one
These types of trades can be tempting especially when the 4 H Chart offers 100 Pips. But what I find is that targets of less than 100 Pips or 100 Pips exactly tend to be associated with weak setups and signals. So even though the 4 H had strong Bearish Signals, the Signal on the Daily Chart was weak. This usually leads to volatility and reversals on the lower time frames.
As you can see, the last Bearish Candle was fairly weak compared to those that normally lead to strong moves such as those that led to the strong downtrend on the left hand side of the chart.
Key is to always keep an eye on the Daily Chart despite how strong the signals on the 4 H Chart maybe.
Usdjpy plays the range, consolidation pattern 110.80-114.60 Strong resistance at 120.40 Support level below the lowest price will target level at 106.00 area, as long as the usdjpy stay above 106 meaning the bullish trend didn’t over yet, but keep staying below 114.60 is not a good sign Moving above 114.60 will lead to 116.40 resistance while crossing this level could give us the 118.20 area
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