I’m serving up a pound + channel double special in today’s intraday charts update, with a couple of channels on GBP/NZD and GBP/JPY on the menu.
GBP/NZD has been steadily climbing ever higher while bouncing up and down inside that there ascending channel.
And as y’all probably know by now, one of the more conservative ways to play an ascending channel is to look for opportunities to go long when the pair is at or close to the channel’s support area.
And, well, that’s where the pair is currently at, as y’all can see. Y’all therefore better start lookin’ for opportunities to go long on the pair. And all the more so, given that stochastic is already pointing back up after reaching oversold territory.
As always, however, there’s always a small chance that the pair may stage a downside channel breakout. And a break past 1.9020 is an early sign that bulls are losing out to the bulls. And if the pair smashes past 1.8890, then the downside break is confirmed and y’all may wanna bail yo longs or even switch bias.
If y’all can still recall, we identified an ascending channel (that y’all can still see) on GBP/JPY’s 1-hour chart way back on October 17. We then kept playing that channel.
And the last time we played it was back on October 20 when we were waiting for the pair to pull back down and test the channel’s support area so that we can add to our longs.
Sadly, the pair left us behind because the uptrend accelerated, so much so that the pair staged an upside channel breakout.
And if take the most recent price action into account, we can see that a fresh but steeper ascending channel has formed. And it just so happens that the pair is at the new channel’s support area, which happens to be the old channel’s resistance area.
Moreover, the area of interest at 150.20 is nearby. And looking at our technical indicators, we can see that stochastic is pointing back up again while them moving averages are in uptrend mode, with the 100 SMA apparently acting as dynamic support to boot.
There’s therefore a good chance that support may form and that the pair may be moving back up again.
But if the new channel fails to hold, then just be ready to abandon ship if the pair smashes past 149.40 and 148.50.
In any case, just make sure to practice proper risk management as always, a’ight?