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GBP/USD comfortably trading above the 1.3125 area means that it has broken above an ascending triangle that’s been holding bulls and bears back since late last week.Before you buy the pound like it’s the last bag of flour in the grocery, though, you should know that Cable is currently testing highs that had held as resistance in late July AND in early August.
A break above the closely watched 1.3175 resistance could lead to a trip to the 1.3250 or even the 1.3300 previous areas of interest.
If 1.3175 holds, however, then we could see GBP/USD dip back to the 1.3125 broken resistance or even retest support levels closer to 1.3025.
A couple of days ago, we talked about AUD/JPY possibly dropping back to its channel support. Well, not only has the pair tested the 200 SMA area, but it has also made new August highs since then!If you missed the move, then you’re in luck! AUD/JPY is back at the 200 SMA that still lines up with the channel support on the 1-hour time frame.
Buying at current levels would yield the best reward-to-risk ratios especially if you’re betting on the Aussie hitting new August highs against the yen.
Not convinced of the Aussie’s strength? You can also wait for AUD/JPY to make new weekly lows and bet on the pair breaking below the channel instead.
Whichever direction you choose to trade, make sure you know all about AUD/JPY’s average volatility so you don’t get stopped out before you see decent price moves, alright?