It’s all about the majors on today’s canvas, as we play around with forex trade setups on USD/JPY and GBP/USD. Which pair would you trade today?
First up is a nice and simple trend trade on USD/JPY. As you can see, the pair found support at the 108.00 major psychological handle that also lines up with an ascending channel support on the 1-hour chart.
Is the dollar on its way to making new monthly highs? Buying at current levels would give you a good reward-to-risk ratio especially if you place your stops just below the channel that we’ve marked.
If you’re not a fan of the dollar, then you could also play a potential downside breakout. Just make sure that your risk management tricks are on point, and that you don’t get caught in a fakeout!
Cable is on its way to the 1.2550 minor psychological zone!
What’s interesting about the level is that it’s also right at a 38.2% Fibonacci retracement level AND the 200 SMA on the 1-hour time frame.Will the bulls encounter enough resistance at the level? Selling at the earliest signs of a bearish momentum and aiming for the previous lows near 1.2450 would get you almost 100 pips if you time your entries right.
Convinced that the pound isn’t done gaining pips against the dollar? Watch how the pair reacts to a 200 SMA retest.
If the bulls bust through it like bullet through tissue paper, then you could start building your long positions all the way to the 1.2650 or even the 1.2750 areas of interest.