Up and at ’em, forex brothas! Today we’re lookin’ at a nice and simple trend play on AUD/USD and a break-and-retest situation on GBP/JPY. Check it out!
Let’s start with a nice and simple trend play on AUD/USD. Remember that downtrend that we spotted a couple of days back? Well, it looks like Aussie bears weren’t in the mood to party in the pip streets.
Instead, the bulls came out to play and forced an uptrend on the 1-hour time frame. What makes the setup interesting is that price has juuust bounced from the .7900 MaPs that just happened to line up with the channel support. Not only that, but stochastic is also about to take off from the oversold region!
Buying at current levels could get you a sweet reward-to-risk ratio especially if you aim for the previous highs near the big .8000. If you’re no fan of the Aussie, though, then you could also wait for the pair to break below said support levels and trade a downside breakout.
Watch this one closely, homies!
After breaking below an ascending triangle and dropping to 139.50, GBP/JPY is now back to testing the 142.50 – 143.50 area. What you should know about the level is that it’s right smack at the broken trend line AND the 100 and 200 SMAs on the daily time frame.
But wait, there’s more! If you look closely, you’ll see that the area also lines up with a 50% Fib retracement, which is convenient since stochastic is fast approaching the overbought territory.
Think the trend line will serve as resistance for the pound this time? Shorting at the earliest signs of rejection could make for a good play, but you can also wait for a bit of momentum if y’all want to play it a bit safer.
If you think that the downside “breakout” was really a fakeout, though, then you could wait for the pair to breach the SMAs and trade a possible move to the big 147.50 resistance.