Rise and shine, forex brothas! We’re having an Aussie special today with a breakout play on GBP/AUD and a mid-range bounce on AUD/JPY. Check ’em while they’re hot!
Breakout alert! GBP/AUD is currently flirting with the 1.6650 levels, which is juuuuust above a falling trend line resistance that hadn’t been broken since mid-2016.
Before you bust out your breakout strategies, you should take note that the pair has yet to break past the 200 SMA on the daily time frame while stochastic is forming a bearish divergence in the making.
A break above the 200 SMA resistance could pave the way for a move to the pair’s previous highs near 1.7100, while a bounce from the descending triangle’s resistance could drag it back to the 1.6000 lows.
Pound bulls could attack as soon as the pair breaks above the 200 SMA but I know some of y’all would wait for a break-and-retest to confirm a breakout. If you think that the pound will continue to see losses against the Aussie, though, then you could also wait for a bit of downside momentum before placing your short orders.
Here’s one for my range playas out there! AUD/JPY looks like it’s about to hit the 81.50 – 82.00 area, which is right smack at a long-term mid-range support on the daily time frame.
What makes the setup more interesting is that the 81.50 – 82.00 area currently lines up with a rising trend line that has been valid since mid-2016. Oh, and look at the 200 SMA just waiting to catch some of them bears!
We’re dealing with the daily time frame here, so y’all will have time to see how the pair reacts to the level before you jump in. Going long at the earliest sign of upside momentum could give you a good reward-to-risk ratio especially if you place your stops just below the trend line.
Just make sure you use wide stops, aight? Yen crosses like these tend to show more volatility than the majors, after all!