Bearish Bets : 2 Key Reversal Patterns Signal Potential Downturn

Looking at this pair, I'm getting the impression that a deeper correction might be imminent. Initially, the breakout from the 88 area wasn't convincing at all as it didn't exhibit significant follow-through, despite the fact that last week it touched a new high @89.700, marking the commencement of a Monthly SUPPLY/SELL zone.

A solid signal that a reversal could be on the horizon is the last 2 out of the 3 weekly' candlestick patterns being key reversal indicators. With both a hanging man and a gravestone doji surfacing following a substantial rally in price, these are important markers of a likely correction.

Considering the weak follow-through on the breakout, the bearish correction candlesticks, and the apparent trend exhaustion in the lower timeframes, I'm inclined to adopt a short-term bearish perspective. This might well be the result of profit-taking and position adjustment in anticipation of the BOJ announcement later this month.

For the early part of this week, I'd like to see the price inching back up towards the 89 region. Then, I will wait for my TRFX indicator to give an entry signal on a lower timeframe chart such as a 2hr, 4hr, and so on, and subsequently establish a position.

My first target will be the 87 level on this position, which corresponds to a previous swing high. The following target would be a descent towards the 85 area, a freshly established DEMAND/BUY level. This could be a desirable level for buyers to reenter for the long haul.


Hope you enjoyed the read I will keep you updated.

Comment:

We got the slight pull back up toward 89 early on Monday hitting 88.7 before selling off heavy I did not get in the position though it is moving exactly as mentioned in the post hitting the first easy target and now moving towards the 2nd target of 85 with potential of dropping a lot more with markets starting to see a BOJ policy shift as early as this month. I will now be looking to sell back in on this asset on pullbacks towards 88 :)