It’s all about trends and potential breakouts on today’s canvas, as we look at NZD/USD’s broken trend and EUR/JPY’s rising wedge. Check it!
A couple of days ago we discussed how NZD/USD’s rising channel support was in danger of being invalidated by a weakening bullish pressure. Well, looks like some bears paid attention!
The pair has since broken below the pattern, but an opportunity to jump in on the new “trend” has emerged. See, Kiwi just turned back from the .7300 major psychological handle, which is right at the previous support AND the 100 and 200 SMAs. What’s more, stochastic is now in the overbought territory!
NZD/USD is already about 30 pips from the resistance area, but you could still get in at current prices if you think that the Kiwi will make new monthly lows this week.
If you’re one of them conservative traders, though, then you could also wait for the pair to actually make new lows AND for the 100 SMA to cross below the 200 SMA to confirm a new trend. In any case, make sure you practice good risk management decisions when executing trades!
Dollar-trading not your thing? Here’s a currency cross setup for you! EUR/JPY is trading on what looks like a rising wedge on the 1-hour time frame.As the School of Pipsology tells us, wedges like these signal pauses in the current trend. More importantly, it means next price action could go in either direction.
Another thing we can note is that a breakout will likely be the size of the base of the pattern. In this case, we’re lookin’ at about 175 pips.
The chart is currently in the bulls’ favor with the pair chillin’ at the wedge support near the 100 SMA, but the bears can always charge in and force a breakout as early as today. Keep close tabs on this one, will you?