We’re talking European currencies today, yo! Check out EUR/USD’s double top and a trend setup on GBP/AUD and see if you can make pips from their charts!
EUR/USD got rejected at the 1.1170 area not once, but TWICE in the last couple of days. Do you know what that means?
It means the sellers are partying at the level! Question is, will this “double top” lead to a downside breakout? The “neckline” in this case is the 1.1075 handle, which lines up with a previous support and resistance level for the pair.
Before you short the euro like there’s no tomorrow, though, you should also note that the 100 SMA is doing a great job of supporting EUR/USD since it crossed above the 200 SMA in mid-October. What’s more, stochastic is also chillin’ in the oversold area!
Selling at a break below the neckline would give you a cool reward-to-risk ratio especially if you aim for the previous lows near the 1.0950 or even the 1.0880 levels.
Not convinced of the euro’s downfall? You might want to wait until EUR/USD breaks above its October highs before you place any long orders.
Here’s one for the trend warriors out there! GBP/AUD looks determined to hit the 1.8550 zone, which is right around the 50% – 61.8% Fibs, 200 SMA, and previous support and resistance levels for the pair.
It’s still about 50 pips away from the kill zone, so y’all still have time to whip up trading plans if you’re planning on taking this setup.
Waiting for consolidation around a support level and then a bit of bullish momentum is the safest way to bet on GBP/AUD continuing its uptrend.
If you’d rather short the pound and are confident that the pair will trade lower before finding buyers, then you could also short at market and then take profits when it actually sees support.
Whichever bias you’re trading this week, make sure you practice your best risk management moves, ya hear?