Who’s up for trading the majors today? I hope you are, because EUR/USD and GBP/USD’s trend on the 1-hour charts are too good to miss!
As you can see, EUR/USD broke above a symmetrical triangle/pennant earlier this week but encountered resistance around the 1.1480 levels.
What makes the setup interesting today is that the pair has only gone back down to the 1.1400 major psychological level, which is right smack at a rising trend line AND the 100 and 200 SMA support zones on the 1-hour chart.
Think the euro is about to pop against the Greenback? Stochastic hasn’t quite reached the oversold territory, but it looks like it’s also about to pop higher.
An extension of bullish momentum could take the euro to its previous highs near 1.1480 if not revisit areas of interest near 1.1500 and 1.1600. Meanwhile, a break below the rising trend line could take the pair to its 1.1300 previous support.
Remember that countertrend trade that we checked out yesterday? Well, it looks like pound bulls paid attention!
Cable is now chillin’ around the 1.2900 psychological area, which is juuuuust above the channel that we spotted. Before you cry “breakout!” though, you should know that 1.2915 is also an area of interest for the pair.
Specifically, the area is almost right at the 200 SMA on the 1-hour time frame. Not only that, but it has also served as support AND resistance for the pair this month.
Stochastic is currently pointing to a slight divergence that could attract some bears. A bounce from 1.2915 could drag the pair back to the descending channel.
But if we ARE looking at a breakout, then look for a firm break above the 200 SMA or even 1.2970 before putting on your long trade orders. In any case, make sure you practice tight risk management skills when trading major currency pairs like these!