In this week's market analysis, we will look at potential trading opportunities and zones where we should look for price action, evidence and potential moves.
Pairs and markets analyzed this week: EUR/MXN and GBP/JPY
Big Shadow Pattern Daily Chart GBP/JPY
This candlestick has a Higher High and a Lower Low than the previous candlestick., it closes in its last third of the bar, there is “room” to the left and its range is bigger than the last 8 candles.
So all the conditions are met, we are dealing with a Big Shadow pattern (more info on this pattern here).
We are going to put our Entry 1 Pip above the high.
We are going to put our Stop 1 Pip below the low.
We are going to set our target, it s very important to know where you are aiming before entering a trade, in this case we are aiming for Target 2 which would give us a nice 5:1 ROI (ex: $100 risked would yield $500).
We also want to keep an eye on our first management point as the 138.5-139.5 area is a well known event area ( S/R ).
Big Shadow patterns are great to trade, but like all price action setups and patterns, they perform better when used in conjunction with key resistance levels.
Nose Engulfing Pattern Daily Chart EUR/MXN
Price finally broke a major support area (19.878-19.9708) and the daily 8 / 21 EMA dynamic support layer so we could be looking at a potential move to the upside from this zone.
Target Level: 21.0
Disclaimer: This is educational and general information only (not advice or a recommendation).
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