short EURJPY
Analysis:
1. Supply Zone: We identified a key supply zone at the top of the chart, where sellers were expected to enter the market.
2. Early Sellers: As price approached the supply zone, some sellers entered early, causing a brief pullback then market reversed hitting stop losses and break evens.
3. Breakout Trap: Price then broke above the supply zone, likely triggering many buy orders and stop losses. However, this move proved to be a trap for breakout buyers.
4. Fakeout: The breakout was quickly reversed, creating a fakeout scenario. This is a common occurrence in forex, where price briefly pierces a key level before reversing.
5. True Sellers: The actual strong selling pressure came in after the fakeout, as indicated on the chart. This is where the "smart money" likely entered their short positions.
6. Current Situation: Price has now fallen significantly from the supply zone, trapping breakout buyers and potentially offering good short opportunities for those who recognized the fakeout.
Key Takeaways:
- Always be cautious of breakouts, especially near strong supply/demand zones.
- Fakeouts can offer excellent entry points if identified correctly.
- Volume and price action around key levels can provide valuable insights into market intentions.
1. Supply Zone: We identified a key supply zone at the top of the chart, where sellers were expected to enter the market.
2. Early Sellers: As price approached the supply zone, some sellers entered early, causing a brief pullback then market reversed hitting stop losses and break evens.
3. Breakout Trap: Price then broke above the supply zone, likely triggering many buy orders and stop losses. However, this move proved to be a trap for breakout buyers.
4. Fakeout: The breakout was quickly reversed, creating a fakeout scenario. This is a common occurrence in forex, where price briefly pierces a key level before reversing.
5. True Sellers: The actual strong selling pressure came in after the fakeout, as indicated on the chart. This is where the "smart money" likely entered their short positions.
6. Current Situation: Price has now fallen significantly from the supply zone, trapping breakout buyers and potentially offering good short opportunities for those who recognized the fakeout.
Key Takeaways:
- Always be cautious of breakouts, especially near strong supply/demand zones.
- Fakeouts can offer excellent entry points if identified correctly.
- Volume and price action around key levels can provide valuable insights into market intentions.
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