Below is a good recap of an analysis which was conducted back in December 2020 [ A private idea, but has played out to perfection - reaching the weekly and monthly imbalance].
A Note before reading - this is a forecast analysis - based upon our trading strategy. This is tagged long, due to purchasing further increments upon imbalances. Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities.
Master Key for zones *Blue = Monthly *Purple = weekly *Red = 4 Days *Yellow = 16 Hours *Orange = Daily *Dark Green = 8 Hour *Grey = 4hour *Pink = 1 hour
Below is the weekly Imbalances - where the Euro has provided a clean fractal point on the monthly imbalance back between 120.00 - 122.XX JPY. The Fibonacci sequence using a four day and daily chart showed the newly created imbalance was a pivot point at the 61.8 - 70.5% Fibonacci retrace zone. see [2] for further charts. Imbalances have a high probability for a retest which aligns with the monthly ray, where price will look to revert to for filling the wicks upon the four day fractals.
[2]
Here is the application of using the Fibonacci extension - where the low has been taken using the monthly imbalance zone [using this as a deep correctional move] where the 114.3X becomes the - [1] The high (or zero) is 127.16X where price - falters and provides a correctional using the imbalance [which aligns to a four day zone].
Here is the evidence where price has corrected using the Fibonacci retracement [weekly Fibonacci] which has aligned the 61.8% with a great imbalance - and a upper correctional imbalance on the 38.2% This is using the four day perspective as a probability to prove the longs/call are still in play from the monthly imbalance.
Probable scenarios - using probability applied to the imbalances and chart data. A possible scenario - where looking left, indicates a low probability of a correctional path. Please note - the weekly imbalance, where price has now exited - the imbalance is now a structural pivot level - where price can close back to - with a lower time frame imbalance offering a close out from sellers to allow the Bulls to 'breathe'.
Scenario 2; Here is the Daily trendline - which accounts for a safe option as a base case scenario. Like previously stated, where wicks are occurring, price can identify this as a reversion point to pick up buy orders - as this is where imbalances lay waiting. Price can now consolidate or make an upside move and tail off when required.
The trend is still in tact, the pair is currently in a correctional phases as imbalances are always retested.
Cross correlation Using the correlation table - and using the average of variable x - where EUR JPY is variable X vs the average of variable Y - where CHF JPY is variable Y Using data from the screenshot below - with the built in indicator of the correlation coefficient.
Below is the real cross asset weekly timeframe comparing the probability of imbalances - where two safe havens (CHF JPY) both indicate a new break of imbalance.
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important resistance and support mentioned too