USD/JPY is trading just below the 108.50 psychological handle, which is interesting because the level lines up with the 200 SMA on the 4-hour chart AND is just above an ascending channel that has been keeping the bears at bay since September.
Think dollar bulls are ready to take charge? Some of USD/JPY’s oscillators think so. As you can see, both Stochastic and Williams %R are already flashing “oversold” signals on the 4-hour time frame.
Buying at the earliest signs of bullish momentum would get you in at a good price especially if USD/JPY pops back up to its 109.50 previous highs.
Before you buy the dollar like there’s no tomorrow, though, you shouldn’t forget that the longer-term downtrend that we spotted a couple of days back is still valid. That means you gotta watch out for them bears or be realistic with your profit targets if you don’t want to get stuck with a losing trade!
If you’d rather trade a downtrend, then you could also sell USD/JPY as soon as it breaks below the channel support that we’re eyeing. You can then aim for previous areas of interests near 107.90, 107.50, or 106.80.
Range trading more your thing? This one should get your attention! EUR/GBP is having trouble making new lows below its current levels. Not surprising since .8500 is a major support level for the pair.
What makes the chart interesting today is that there might be a bullish divergence in the making. Not only that, but EUR/GBP’s MarketMilk ranges are suggesting that the pair is near its three and six-month lows and only a bit higher than its monthly lows. That should get the attention of some bulls, don’t you think?
I’m not seeing any bullish momentum just yet, so you still have time to design a trading plan so you know how to trade EUR/GBP’s next price moves.
If it starts to turn higher, then you can aim for the .8700 area of interest or even the .9000 mid-range levels.
If EUR/GBP starts making new monthly lows, however, then you better watch how the pair reacts to .8500 to see if it’s (a) a cheaper price to buy or (b) the start of a bigger downside breakout.
Good luck and good trading this one!