Big Picture (WK)
- Currently price is supported by previous year (2013) high
Zooming In (H4)
- Following a Big Move, price is now retracing to previous support levels.
So what now?
- If you’re looking to trade with the trend and trade inline with the BM, then you would have to wait for point 4 to form.
- If you’re of a contrarian nature and don’t mind a counter trend trade and the risk, then there might be a opportunity to trade down to the support.
Update 26 March 2014 (by Jerome)
- Referring to previous blog post on NZDJPY. Regarding the downflow, why is it that we need to wait for a new point 4? Why can’t we take the point “3?” as point 4 and already WR and short?
- Actually the diagram I posted did not exactly mean that we’re waiting for another point4. Just that the point 4 was not yet confirmed as a point 4 is only confirmed upon a WR trigger. Also as this is a counter trend trade, a convincing close needs to happen preferably on H4.
- Price has found it difficult to close convincingly below the previously mentioned pt2.
- If price is to head lower, it must clear the immediate support zones first.
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