Happy Friyay, y’all! Let’s end the week on a strong note by checking out these trend and triangle setups on GBP/USD and GBP/CHF!
After breaking below an ascending channel around mid-April, Cable looks ready for a trend change. I’m talking about a downtrend, yo!
GBP/USD just bounced from the 1.3050 minor psychological handle, which lines up with a falling trend line AND 200 SMA resistance on the 4-hour time frame.
Can the bears sustain their momentum? A long trade at current levels would give you a good reward-to-risk ratio especially if the pound ends up making new monthly lows against the dollar.
If you’d rather buy the pound, however, then you might want to wait until the pair breaks above the resistance areas that we’re watching before you place your buy orders.
Whichever side you’re on today, make sure you’re practicing good risk management habits so you’ll up your chances of trading for another day!
GBP/CHF is poppin’ up some interesting dojis around the 1.3325 level, which isn’t surprising since it lines up with a resistance mark from earlier this year.
Are the bulls just getting a breather? Or will the bears take advantage of the resistance and drag it back to the trend line support closer to 1.3025?
Countertrend traders and pound bears can nibble small positions around current levels in anticipation of a trend line retest.
If you think that we’re looking at an ascending triangle breakout in the making, though, then you could also wait for a legit break above the previous resistance before you place your long trades.
Think GBP/CHF will break higher but don’t want to get caught in a fakeout? No worries, just wait for a breakout and wait for a retest of the broken resistance for a “safer” entry!
Just note that a “break and retest” situation is not guaranteed for a lot of breakouts. Then again, what is?