I know that a lot of you guys are waiting for my analysis on the EURUSD and USDJPY and therefore I have posted it today.
In this session, I am going to teach you how to do a proper top down analysis on your chart before the start of the week so that you have a big picture of the market movement.
The top down analysis is a way of reading the forex chart from the highest time frame to the lower time frame. For me, I do it on the weekly, daily, 4 hourly, hourly and lastly the 15 minutes chart which I do all the trading.
During the analysis, this is what we look for
- Trend of the particular chart
- Existence of any major support and resistance
- Existence of any breakout on the chart
For the Daily chart, you can see that the trend on this pair is DOWN but one thing you need to take note is that the price is making a higher high and lower low which is a sign of a up move.
On the 4 hourly chart, the price has hit the 400 EMA and is being repelled up
For the hourly chart, you can see that the price has hit the 100 EMA resistance and looks like it is being pushed down
On the 15 minutes chart, you can see that the price is currently on the downtrend
With the daily chart producing higher high but the 15 minutes chart showing a down trend, this explains why the price move sideway on last Friday.
If the price manage to break the 400 EMA resistance on the 15 minutes chart and produce a valid break through, then it is a good chance for us to get a BUY trade
If the price manage to break below the 1.10839 level, you can look to go SHORT
On the daily chart, you can see that the price is being resisted by a major resistance at 109.695 which is why the price try so hard to break upward on last Friday.
On the weekly chart, the price is also being resisted by the 100 and 200 EMAs.
For this pair, I will look to go SHORT this week
At the same time, I hope that this live chart tutorial on the Top Down Analysis will also teach you how to approach your chart every week as well.
If you are interested to join my course or trade copier service where you can copy my trade, you can take a look at my course website below or send me an email so that I can tell you more about it