Yesterday, we were discussing a few components of how I approach some basic analysis with a couple of the Yen Crosses.

The flight to quality and safe haven aspects of the Yen and the Dollar had given us some deeply strong downtrends to work with, and we were looking at selling into strength in a coiling range. But first…we needed to monitor a potential breakout situation of our price action inside of a common chart pattern.

My “built-in Lesson” yesterday was my principle of not knowing when we would see this coiling and building of energy breakout of the flag/pennant formation we were in.

(Technically…we really do have ascending triangles here…I just call them flags or pennants…as in these cases…they are functioning the same. Just a matter of semantics, I suppose, but you get the idea…)

Well…we certainly have our answer, don’t we!

(Click to enlarge the Captures…)

Our Pound Yen example illustrates this point beautifully, ( Euro Yen is virtually identical…), as we actually stimulated the break to the upside a few hours after I wrote yesterday’s post. Our little magenta Arrow signals the bullish candle breakout of our pattern.

 I left yesterday’s support and resistance range intact, and simply drew in another area.

Often, we will see these horizontal “rectangle” levels…a support and resistance pip range… be proportionate as well. It is very similar to our vertical proportionate Price action with the Fractals. The same “building blocks” idea.

(Of course, our retracement did not actually “complete” there on the 50% Fibonacci level…but was simply “resting” there, but the level was still a clear magnet for Price…)

We even heard throughout the day a “Return of the Carry Trade!” from the news media.

Well… in my opinion… a one-day upside break does not a Carry Trade make!

That’s OK, though…as we all know, the media has to have something to say and have a story. That does NOT mean you have to listen to it.

My “built-in Lesson” today is this:

Listen to your analysis!

It might not be as attractive as the ladies on the business channels….but surely it will be more dependable for your needs.