I hope y’all are in the mood for another stroll down memory lane ‘coz we’ll be checking up on old setups on EUR/JPY and GBP/JPY in today’s intraday charts update. Of course, we’ll be lookin’ for fresh plays as well.
We found that there ascending channel way, way back on September 6. And back then, the pair was testing the channel’s support area at 129.50, so we were lookin’ to go long on the pair.
The pair sure took its time. But since then, the pair left 129.50 and soared all the way to the channel’s resistance area at 134.00. That’s a 450-pip move, by the way, which ain’t bad for a two-week run. So congratulations if you were able to ride that delicious trend. Aww, yea! We got some serious bank, dawg!
Anyhow, the channel is still valid and the pair appears to be hesitating at the channel’s resistance area. The pair will therefore likely be making its way back down sooner or later. And if it does, then them bears will likely be gunning for the channel’s support area, which should be somewhere between 132.00 and 131.30.
Going short here is extra risky, though, so only the real gangsta traders should even think about it. And all the more so, given that stochastic is about to reach oversold territory already, which means that there may be a small chance for an upside channel breakout as well.
Anyhow, if the pair does move back down, just be ready to bail yo shorts or perhaps even switch to a bearish bias should the pair breach 130.60, since that’s an early sign that bears are in control. A downside break ain’t validated yet until 129.50 is breached, though.
If y’all can still recall, we originally had a descending channel setup on GBP/JPY’s 1-hour chart way back on September 4. Our main scenario was for a downside move, but that didn’t pan out.
Fortunately, our other scenario – an upside channel breakout past 143.00 and 144.00 – did play out. And if you’ve been riding that trend non-stop, then you must be rolling in pips now, huh? Almost 900 pips in less than a month ain’t a bad catch. Know what I’m sayin?
Anyhow, we tried to add to our longs again on back on September 13 by using a Fibonacci setup. And we mainly had our eyes on a 50% retracement setup to 144.0. Sadly, that didn’t happen. However, I did warn y’all that the pair could go higher past 144.00, so if you were gangsta enough to jump in when the pair moved higher, then congratulations.
For today’s play, we’ve got two scenarios in mind. The first and more gangsta scenario is a bullish flag setup.
As y’all can see, the pair has been trading sideways recently after hitting resistance at 151.60. The pair could still go higher. And if or when it does, then the pair will likely have enough “oomph” for a 600-pip move, based on the height of the flag and its “pole”.
As for our second and more conservative scenario, we’ve got a Fibonacci retracement play. And if the pair does start pulling back, then the pair will probably find support at the 50% retracement at 148.60.
However, the pair could go even lower to the 61.8% retracement level since that is just above the broken resistance area at 147.60. But if it goes past that and then smashes past 146.60 on strong bearish momentum, then y’all may wanna bail since that an early sign that bears are in control.
In any case, just make sure to practice proper risk management, a’ight?