Who’s up for trading 4-hour and daily time frames today? I hope you are, because I’ve found neat setups on EUR/JPY and NZD/USD!
I spy with my cool, blue eyes a reversal pattern in the making! As you can see on the chart above, EUR/JPY is currently finding support at the 128.75 mid-channel support near the 100 SMA.
Before you buy the pair like there’s no tomorrow, though, take note that the pair seems to be forming a head and shoulders pattern on the 4-hour time frame.
Also notice that the “neckline” of the pattern is right around the mid-channel line while the distance between the head and the neckline – the possible strength of a downside breakout – is nearly as far as the distance to the rising channel support.
A break below the mid-channel support could drag the pair back to the 126.50 support near the 200 SMA. But if the head and shoulders pattern turns out to be a dud, then the euro could pop back up to its previous highs near 130.75.
Breakout alert! NZD/USD has not only broken above a falling channel on the daily time frame, but it has also just bounced from a retest of the broken resistance level.
The pair is currently lollygagging around the .7350 levels, which lines up with an area of interest from a few months back.
Will the bears defend the area one more time? Stochastic is about to hit overbought, so there might be a bit more pressure to sell around current levels.
If the bulls find enough muscle in their hustle, though, then they could push the Kiwi to new 2017 highs. In this case, y’all might want to watch the .7700 psychological handle, which has served as support and resistance back in late 2015 and early 2016.
What do you think? Will NZD/USD bounce back down to its long-term channel? Or will it make new yearly highs over the next couple of days?