Who’s up for trading the European currencies today? Check out these trend and countertrend setups on GBP/USD and EUR/JPY and see if you can make decent trades out of them!
Remember that ascending channel that we checked out a few days ago? Well, it looks like the bears finally found enough support to drag it lower!
GBP/USD is currently chillin’ like a villain on the 1.3185 levels, which lines up with the channel support that the pair had broken earlier this week.
What makes the current price more interesting is that it’s also near the 100 and 200 SMA crossover on the 1-hour time frame.
Are we looking at the start of the pound’s downtrend? Shorting at the earliest signs of a momentum is a good idea if you believe that the pound will head lower against the dollar. The pair hasn’t fallen below its March lows, though, so a bearish momentum isn’t a done deal just yet.
If you’re betting on the pound extending its uptrend, then you might want to wait until the pair trades above the SMAs before you pull the trigger on your long trades.
Whichever direction you’re trading, make sure you’re practicing good risk management when you’re executing your trades!
Trend-trading more your thing? Here’s one for ya!
EUR/JPY is having trouble trading below the 126.25 handle, which is right smack at a 61.8% Fib retracement, trend line, and previous channel resistance level on the 4-hour time frame.
A long trade at current levels would give you a good reward-to-risk ratio if the euro pops back up to its 127.50 previous highs.
Just make sure to use wide stops, aight? Currency crosses – especially on higher time frames – tend to see higher volatility than the major pairs, so make sure you don’t get stopped out too early by placing generous stop loss levels!