For this week’s final intraday charts update, I’ve got a couple of channels on GBP/USD and GBP/JPY that the trend riders out there may like.
GBP/USD has been trading ever lower recently while bouncing up and down inside that there descending channel.
And as y’all should know by now, one of the more conservative ways to play a descending channel is to look for opportunities to go short on the pair when the pair is at or close to the channel’s resistance area.
Well, as it turns out, that’s where the channel is currently at, so y’all therefore better start looking. Just note, though, that the closest area of interest is at the 1.3200 major psychological level. There’s therefore a chance that the pair may temporarily stage an upside channel breakout.
Although y’all may wanna bail yo shorts if the pair continues climbing and takes out 1.3260 since that would be sign that the upside channel breakout is the real deal. But if resistance forms and the pair starts turning lower, then them bears will likely be gunning for 1.3050 next.
Okay, gotta keep real with ya. That there ascending channel in GBP/JPY’s 1-hour chart ain’t exactly new since we first identified that back on Tuesday.
Back then, the pair was testing the channel’s support area just below the area of interest at 148.20. And since then, the pair bounced off support, didn’t quite reach the channel’s resistance area, moved back down, and then bounced off the channel’s support again.
And if you’ve been playing the channel all that time, then congratulations on bagging some pips. Aww, yeah!
Anyhow, the channel is still intact and the pair is about to test the channel’s resistance area again. Also, stochastic is already signaling overbought conditions and all that. Today’s play is therefore to play the channel again to by waiting for a chance to go long again when the pair retests the channel’s support.
Do note, however, that the pair failed to reach the channel’s resistance area the last time around. That may mean that bearish interest is building up, so there’s a chance for a downside channel breakout. Y’all therefore better be ready to switch bias if the pair smashes past the area of interest at 146.40.
In any case, just make sure that you always practice proper risk management, a’ight? Peace! I’m out! See y’all again next week!