Up and at ’em, forex folks! Hit the ground running this week with these hot comdoll trade opportunities on GBP/AUD and NZD/JPY!
I spy with my little eye a potential double bottom breakout in the making! GBP/AUD has just bounced from the 1.6310 level for a second time and is now testing a “neckline” around the 1.6500 area on the 4-hour time frame.
As the School of Pipsology tells us, a double bottom breakout could be as strong as the distance between the lows and the neckline. In this case, we’re talking 200 pips (or a move to 1.6700) in case of an upside break.
1.6700 sure looks like it’s a level to watch especially since it was an area of interest in June and is near the 100 and 200 SMAs on the 1-hour time frame.
Before you buy the pair like there’s no tomorrow, though, take note that stochastic is already in the overbought territory. More importantly, don’t forget that countertrend trading isn’t for everyone!
Here’s one for position traders out there! NZD/JPY us having trouble breaking above the 83.50 handle, which is right smack at an ascending triangle resistance. Heck, the pair hasn’t traded above the level since June last 2015!
What makes the setup even more interesting is that a bearish divergence has popped up on the daily time frame. If the bears do get the muscle they need for a momentum, then we could be looking at a move to 80.00, if not the triangle support near 79.50.
But if the bulls win the tug-o-pips and manage to force an upside breakout, then consider 86.50 and 89.00 as potential targets. Just make sure you place wide stops when trading yen crosses (and long-term time frames) like these, aight?