After days of covering currency crosses, we’re finally focusing on the dollar! Check out these hot setups I’ve found on USD/JPY and AUD/USD’s charts!
USD/JPY is about to bounce from the 107.00 psychological handle, which is right smack at the 200 SMA AND a potential range support on the 4-hour time frame.
What makes the setup more interesting is that stochastic is also poppin’ up an oversold signal on the chart.
Think the dollar will find its way back to the 108.50 range resistance zone? If you do, then you can buy at current levels and place your stops just below the 107.00 mark to target a good reward-to-risk ratio.
Not a dollar fan? That’s fine, you can also wait for USD/JPY to make a clean break below the range support that we’re eyeing before you pull the trigger on any short trade.
Whichever bias you choose to trade this week, make sure you use your best risk management tricks! You wouldn’t want to wipe out your account on one trade, do you?
Countertrend traders huddle up! AUD/USD just sported an interesting doji, which is interesting enough if it also didn’t do so near the .6700 major psychological handle AND a descending channel support on the daily time frame.
The cherry on top of this sweet setup sundae is a bullish divergence forming on the chart.
Before you buy the Aussie like there’s no tomorrow, though, you gotta remember that countertrend trading isn’t for everyone. Some people just fare better following trends, ‘namsayin?
If you want to shoot your shot anyway, then you can buy AUD/USD at the earliest signs of bullish momentum and aim for potential retracements to the .6800 or .6875 previous areas of interests.
Want to short the Aussie instead? Once you see AUD/USD pop up, then you can use areas of interests to plot potential resistance and entry levels and aim for .6700 or even new lows.
Lastly, you can also trade a downside breakout if AUD/USD breaks this week’s lows without retracing.