It’s Friyay, yo! End your week on a strong note with these short-term trend and retracement plays on GBP/AUD and EUR/CHF!
Remember that break-and-retest play that we spotted earlier this week? Well, I hope you bagged a few pips from the move!
Right now GBP/AUD is chillin’ like a villain around the 1.6825 area, which is right smack at a falling channel resistance AND the 100 SMA on the 1-hour time frame.
Will the pound see more losses against the Aussie? Shorting at current levels is a good idea if you think that the pair would hit new monthly lows. Watch out for the 1.6725 support, though, as it looks like a lot of bulls are hanging around the area!
Here’s another one for trend traders out there! As you can see, EUR/CHF broke above a falling trend line resistance to test the 1.0900 major psychological earlier this week.But nothing is forever and that includes the euro bulls’ run. The pair is currently back at the 1.0870 area of interest, which is riiiight above an SMA crossover on the 1-hour time frame. What’s more, there’s a bullish divergence popping up to entice the bulls again!
Buying at the earliest signs of bullish momentum could still get you a good enough reward-to-risk ratio especially if you target the previous highs near 1.0900 – 1.0920 and place your stops just below the broken trend line.
If you’re one of them euro bears, though, then you could also wait for a break below said support levels and trade a move back to the 1.0840 support or even new lows for the pair. In any case, make sure you use proper risk management when taking your trades!