Today, we’ve got a couple of simple technical short setups for you longer-term players out there: a support break on USD/CAD & a Fib play on EUR/JPY.
Got a sweet longer-term setup on EUR/JPY for you bears out there, especially if you’re feeling today’s risk-off sentiment has legs for the next few weeks. On the daily chart above, we can see the pair has grinding slowly higher over the past few months, slowing down around the 50% Fibonacci retracement area of the longer-term swing move from around 127.00 to 116.00 in 2019. We’re also see bearish divergence forming between the higher ‘highs’ in price, while the ‘highs’ on the stochastic keeps ticking lower. If the market can break below the support area around the 120.00 – 121.00 area, traders could take this market back to the 2019 low’s, almost 4% away from current levels.
As we can see on the daily chart above, USD/CAD recently busted below a major support area around 1.3050 – 1.3100, and is now trading below the major psychological handle of 1.3000. With the Loonie somewhat benefiting from the spike higher in oil and the Greenback falling on today’s geopolitical events (U.S. kills Iranian commander), this could be the start of a bigger move lower. The next hurdle for the bears is the 1.2850 area, so the potential return-on-risk is favorable if setting stops just above the 1.3100 handle, even more so if targeting the 2018 lows around 1.2300 if going for a very long term play.
Whatever strategy you decide to go with, always remember to practice good risk management skills when you execute them trading plans!
Forex Chart Settings:
Slow Stochastic: 14,3,3