Trend-traders huddle up! Whether you like trading dollar pairs or currency crosses, I’ve got your back with simple channel plays on USD/CAD and EUR/JPY. Check it!
EUR/JPY just just bounced from a channel support that has been valid since late May but is having trouble making new highs above the 130.00 major psychological handle.
And why not? The 130.00 mark is just below the 200 SMA on the chart while stochastic is flashing an overbought signal.
Can EUR/JPY still sustain its uptrend? A break above the 200 SMA could push the pair back up to the 130.75 area of interest or even the previous highs near 132.00.
If you think that the euro will touch its July lows before jumping back up, though, then you could also wait for a channel support retest for a better entry area. Just make sure you place wide stops on currency crosses like these, aight?
If you’re not into currency crosses, then this one’s for you! USD/CAD is flirting with the big 1.3000 psychological handle, which is right smack at a channel support that hasn’t been broken since the start of the year.
Buying at the earliest signs of a bounce would give you a good reward-to-risk ratio especially if you aim for the previous highs just below 1.3500.
If you’re one of them dollar bears, though, then you could also wait for the pair to trade below the channel and trade a downside breakout instead.
Whichever bias you choose to trade, make sure that you practice good risk management in your execution!