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Where my trading brothas at? Today we’re looking at a possible head and shoulders play on USD/JPY and a potential breakout on EUR/CHF. Get ’em while they’re hot!

USD/JPY: 4-hour

USD/JPY 4-hour Forex Chart
USD/JPY 4-hour Forex Chart

USD/JPY is having trouble breaking above the 113.00 area, which isn’t surprising since it’s near the 200 SMA on the chart. What makes the setup interesting is that it’s looking like a head and shoulders situation on the 4-hour chart.

I’m seeing a neckline just below the 112.00 handle, so y’all watch out for a possible head and shoulders break if it does drop below the level. As the School of Pipsology tells us, breakouts can be as high as the distance between the neckline and the top of the “head.”

If you’re not buying the potential reversal story, though, then you could also wait for the Greenback to make new weekly highs against the yen and aim for a revisit of the December highs above 113.50.

Keep close tabs on this one, will ya?

EUR/CHF: 4-hour

EUR/CHF 4-hour Forex Chart
EUR/CHF 4-hour Forex Chart

Breakout alert! EUR/CHF just dropped below a rising trend line support, which also happens to mark the support of an ascending triangle on the 4-hour time frame.

Are we looking at a legit breakout? Or is this a fakeout in the making? Stochastic is about to hit oversold territory and the pair is near the 1.1600 area of interest, so bulls and bears could already be watching this one.

A bounce from the 1.1600 MaPs could lead to a retest of the broken trend line before the pair completes a reversal. But if the pair bounces back above the trend line, then we ARE looking at a fakeout that opens the euro to a possible move to its 1.1720 previous resistance.

Forex Chart Settings:

Slow Stochastic: 14,3,3
100 SMA: Blue line
200 SMA: Red line4