Whattup, forex brothas! Get over your mid-week hump by checkin’ out these hot retracement plays on GBP/USD and CAD/JPY!
After breaking above a range and hitting highs near 84.50, CAD/JPY looks set for a bit of retracement. And as you can see, the 83.50 handle looks like a sweet spot for bulls and bears to play with since it lines up with the broken range resistance on the 4-hour time frame.Are we seeing a break-and-retest situation in the making? Stochastic hasn’t quite reached the oversold territory just yet, so forex bears still have a bit more room to move before seeing some buying pressure.
If the pair consolidates, then sees upside momentum at 83.50, then CAD/JPY has one more confirmation of an upside breakout and could pop back up to its June highs, if not the 85.00 handle.
But if the pair continues to drop and doesn’t come up for air until it meets the 100 and 200 SMAs near the middle of the broken range, then we’re dealing with a fakeout after all.
In any case, make sure you watch the 83.50 level for clues on the pair’s direction!
Somebody holler at Huck because this setup is too good to miss! GBP/USD is currently lollygagging at the 1.2600 handle, which isn’t surprising since the level has been an area of interest for the pair since late last year.
What makes the level more interesting this time around is that it lines up with not only a 50% Fib retracement, but also the 100 SMA that has just crossed the 200 SMA on the daily chart.
Will we see a bounce from Cable in the next couple of days? Stochastic is almost at the oversold region, so you can bet your pips (with proper risk management, of course) that the bulls are already watching.
Buying at the earliest signs of a bounce could get you a decent reward-to-risk ratio especially if you aim for the previous highs near 1.3000. But if you think that pound bears still have muscle in their hustle, then you could also wait for a break below said support levels and aim for the previous support near 1.2150.