Welcome to another week of charting!
Remember that uptrend that we spotted last week? Well, the Aussie DID make new highs after hitting them support levels, but the bears soon had enough momentum to drag AUD/JPY below the SMAs.This week, AUD/JPY is trading on what looks like a descending channel. What’s more, it’s about to hit its resistance levels that just happen to line up with a broken support level AND the 200 SMA on the 1-hour chart. Coincidence? Only if you want it to be!
Shorting at current levels would give you a good reward-to-risk ratio especially if you’re betting on AUD/JPY making new lows below the 75.50 area.
If you’re not too sure about the Aussie weakening against the yen, then you can also wait for bearish momentum before you place them short orders. Or you can also wait for a clear break above the channel and then aim for retests of last week’s highs near 76.70.
Resistance alert! In case you missed the big title, we’re looking at bearish plays today.
In GBP/USD’s case, the pair is about 100 pips away from the 1.3200 handle that has been successfully keeping the bulls at bay since mid-2018. Talk about commitment!Is the pound in for some serious losses against the dollar? Shorting at current levels could still work if you’re in it for the long haul and you place your stops just above the 1.3200 mark.
Feel like buying the pound instead? That’s fine, too. If you check the lower time frames, you’ll find that Cable is at the lower end of a short-term range. If you buy around 1.3100 and the pair ends up retesting the 1.3200 resistance, then you could get yourself a nice 100-pip win.
Whichever bias you end up trading this week, make sure to do it while sticking to your trading plan!