Up and at ’em, forex brothas! Get over the mid-week hump by checkin’ out these hot retracement plays on GBP/USD and NZD/JPY!
First up is a nice and simple trend play on Cable. The pair found resistance at the 1.3350 handle and it looks like it’s now gunning for 1.2850.
What makes the minor psychological level more interesting is that it lines up with not only the rising channel support but also the 100 SMA on the daily chart. A pretty good picture considering that stochastic is about to hit oversold levels.
Will the pound find support at the level? Or will forex bears hit the brakes around 1.2900 before the bulls take over once more? A bullish momentum could push the pair back to its previous highs near 1.3350, while a trip down to its previous lows could take the pair back to 1.2750 – 1.2850.
Remember that ascending triangle that we spotted a couple of days back? Well, it looks like the bears paid attention!
NZD/JPY is currently back at the 80.50 levels, which is juuuust shy of the 80.00 major psychological handle that also happens to line up with the 50% – 61.8% Fibs and the 100 and 200 SMAs on the daily chart. Not only that, but stochastic is already chillin’ like a villain on the oversold territory!
Kiwi doesn’t look like it’s ready to sport a bounce just yet, so you could wait for a couple more candlesticks before you place your long trades.
If you’re lucky, you could catch a position somewhere around the ascending triangle support. If not, buying around the Fib levels could still get you a decent reward-to-risk ratio especially if you aim for the triangle resistance near 83.50 or even an upside breakout.