How are my favorite forex friends? Let’s revisit GBP/USD and EUR/JPY’s charts and see if we can squeeze some more pips from their setups!
EUR/JPY is flirting with the 117.50 minor psychological handle, which is a hair’s breadth away from the 117.75 resistance that we identified a few days back.
What makes the chart interesting today is that the pair just popped up a dragonfly doji just as it hit the 100 SMA on the 4-hour chart. Oh, and stochastic is chillin’ in the overbought region!
Coincidence? That’s just the name of my good friend in Vegas!
Shorting at the earliest signs of bearish momentum would give you a good reward-to-risk ratio especially if the euro drops back to its 116.00 previous lows.
If you’d rather bet on a euro rally, though, then you could also wait until EUR/JPY breaks above the 100 SMA and aim for a possible retest of the 200 SMA.
Currency cross trading not your thing? Here’s a dollar-related setup for ya! GBP/USD is knocking on the 1.2275 area, which is right smack at a previous channel support AND previous resistance on the daily time frame.
Will the resistance hold again this week? Shorting at the first signs of bearishness could mean favorable odds in case GBP/USD hits new 2019 lows.
If you think that Cable’s current momentum points to the pair poppin’ back up to the descending channel, however, then you could also wait for a clear break above the support-turned-resistance level that we’re watching.
In case of an upside breakout, then y’all should at least look at 1.2500 or 1.2700 as potential profit targets.
Whichever bias you’re trading this week, make sure you’re bringing your best risk management game to the table!