Hey folks, it’s a wrap to yet another month in the 2023 calendar, and I’m guessing you know what that means - time for another episode in the “What To Trade” series. For December, I will be mapping out trade more cautiously as the market volatility often drops
TRADE IDEA: What's Next for Yen Crosses? - 27-12-2022
2022-12-28 • Updated
The trend in the scenario above is clearly bearish. We have also had a recent break of structure at the marked horizontal arrows, which means we can expect price to react from the supply zone that broke the structure. Coincidentally, the supply zone and the 200-SMA are perfectly aligned around the same area.
After the bearish break of structure, we see price steadily angling towards the supply zone for a retest. The zone of interest also has the 100-SMA and the Fibonacci retracement levels as added confluence.
EURJPY can be seen to have successfully broken out of the wedge pattern with an accompanying break of structure. As a result, price is expected to retest the supply zone that created the break of structure. This means my bias here is also bearish.
After the initial breakout from the wedge pattern - and break of structure - we see price gliding slowly higher towards the 75% Fibonacci retracement level. The highlighted zone is expected to react away from the supply zone. There is also the notable presence of a trendline resistance around that zone confirming the likelihood of a bearish continuation from the marked spot.
Overall bias on CHFJPY is bearish, however, there's been a bullish break of structure serving as a confirmation of the market's intention to retest the marked supply area before dropping further.
Price in this scenario is clearly in search of a reliable zone it could actually get to react from. Already the sluggish price action is an indication that momentum is low, therefore, price would be looking for an order-filled region to capture liquidity. The highlighted supply zone is my preferred area of entry though.
The views above are solely based on Technical Analysis techniques using my personal Smart Money approach. Hence, it is important to understand that the trading of CFDs comes at risk; if not properly managed, you may lose all of your trading capital. To avoid costly mistakes while you look to trade these opportunities, be sure to do your own due diligence and manage your risk appropriately.
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