Can you believe we’re already into the middle of the week? Check out these setups on GBP/USD and EUR/AUD and see if you can get pips off of them!
Cable fell to a 2018 low of 1.2500 earlier this month, but it looks like it’s on its way to retest the 1.2700 major psychological handle.
What makes the setup more interesting is that the 1.2700 mark had served as support back in August and for most of Q4 2018. Not only that, but it’s also right around the current 100 SMA levels!
Will GBP/USD’s retracement stop at the previous support level? Shorting at the earliest signs of a bounce could give you a good reward-to-risk ratio especially if you think that the pound will hit new lows before the year ends.
If you’re not sold on more pound weakness, though, then you could also wait for the pair to break above the 1.2700 MaPs and 100 SMA and trade Cable’s possible return to its long-term range pattern.
Dollar-trading not your thing? Here’s one for ya! EUR/AUD is having trouble trading above the 1.5850 level, which isn’t surprising since it lines up with not only the 100 and 200 SMAs, but also the broken support of an ascending channel.
Question is, will the hesitation around 1.5850 translate to downward momentum for the euro? Shorting at current levels could give you tons of pips especially if the pair drops back to its 1.5400 or 1.5275 lows.
A break above the resistance areas that we’ve marked, however, could lead to retests of the euro’s previous highs near 1.6300.
Whichever bias you choose to trade, make sure you use good risk management practices when you execute your plans, aight?