Who’s in the mood to trade currency crosses today? I hope you are, because I’m comin’ in hot with these tradeable trend plays on EUR/GBP and AUD/JPY!
First up is a nice and simple setup on EUR/GBP. As you can see, the pair is turning lower after hitting resistance at the .8950 minor psychological handle.
If you’re planning on jumping on the uptrend, then you’ll want to do it closer to the .8900 area since it’s right around the 100 SMA and a rising trend line that has been supporting the pair since late May.
Think we’re actually looking at the start of long-term reversal for EUR/GBP? That’s fine, too. You can start executing them shorts as soon as the pair breaks below the trend line and threatens to break the 200 SMA on the 4-hour chart.
Whichever bias you choose to execute, make sure you place them stops on your trades! Currency crosses tend to be more volatile than the majors, so you’ll also want to place WIDE stops to avoid getting taken out by a bit of extra volatility.
I spy with my eye a rising wedge in the making!
In case you missed the memo, wedges like these tend to pop up after strong one-directional moves. Thing is, they could signal continuation OR reversal.
So, which way will AUD/JPY go? The pair is still confined within the pattern, so y’all have time to whip up trading plans if you want in on this one.
A break above the wedge AND the 100 SMA could push the pair back to its previous highs near 76.00.
If the pair breaks below the pattern, however, then you could target the previous support levels near 72.75 – 73.00.
Good luck and good trading, forex friends!