Here are two charts of an equally weighted JPY index. On the right I have the daily timeframe and on the left I have the 4hr timeframe.
On the daily, I have marked two zones, a supply and demand zone. Price is much closer to demand than supply giving me the impression that price will have an easier time going up than down. This is setting my overall bullish tone for JPY.
On the 4hr chart, we can see price trending down illustrated with a descending channel. On the bottom of the 4hr chart I have the Rate Of Change indicator with an exponential Bollinger Band for contexts. ROC is a basic momentum indicator. I show on the chart that momentum has been diverging with price. The last red candle on the chart(circled on the chart) may have been panic selling. Panic selling is a phenomenon that the end of moves that signal a potential swing low is forming. Notice how the ROC histogram bars were getting smaller and small and then a large bar(circled at the bottom) forms as price puts in a short term low.
Conclusion: Looking for JPY strength to continue. If so, I will try to buy JPY against it counterparts. Looking at my relative strength analysis, good currencies to sell against JPY would be GBP, CAD, EUR and AUD.
On the daily, I have marked two zones, a supply and demand zone. Price is much closer to demand than supply giving me the impression that price will have an easier time going up than down. This is setting my overall bullish tone for JPY.
On the 4hr chart, we can see price trending down illustrated with a descending channel. On the bottom of the 4hr chart I have the Rate Of Change indicator with an exponential Bollinger Band for contexts. ROC is a basic momentum indicator. I show on the chart that momentum has been diverging with price. The last red candle on the chart(circled on the chart) may have been panic selling. Panic selling is a phenomenon that the end of moves that signal a potential swing low is forming. Notice how the ROC histogram bars were getting smaller and small and then a large bar(circled at the bottom) forms as price puts in a short term low.
Conclusion: Looking for JPY strength to continue. If so, I will try to buy JPY against it counterparts. Looking at my relative strength analysis, good currencies to sell against JPY would be GBP, CAD, EUR and AUD.
Comment:
After the edit grace period I noticed I referenced the daily chart instead of the 2 day chart in my explanation. The Chart on the right, labeled "Majors Based JPY Index Daily", is actually a 2 day chart. Sorry for the mistype and any confusion.
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