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Who’s ready to catch pips today?

I hope you are because USD/JPY is trending higher and GBP/NZD may be in for a reversal!

Lemme show you what’s up on their 1-hour and 4-hour charts.

USD/JPY: 1-hour

USD/JPY 1-hour Forex Chart
USD/JPY 1-hour Forex Chart

Trend traders listen up! USD/JPY is lollygagging around the 106.00 psychological handle, which is right smack at an ascending channel support that’s been keeping the bulls alive since mid-August.

If you think that the dollar will continue to kick the yen’s butt, then you can buy at current levels and aim for this week’s highs near 106.50 for a quick trade with a decent reward-to-risk ratio.

Not feelin’ the love for the Greenback? That’s aight, you can also plot your orders around a potential downside breakout (breakdow) that would take USD/JPY down to its 105.50 or 105.25 previous lows.

Watch this one closely, yo!

GBP/NZD: 4-hour

GBP/NZD 4-hour Forex Chart
GBP/NZD 4-hour Forex Chart

Is it me, or is GBP/NZD forming a head and shoulders pattern on the 4-hour time frame?

For newbies out there, a head and shoulders pattern usually signals a reversal when it pops up after a strong upswing.

If the currency pair breaks below its 1.9900 “neckline,” then we could see the pound dragged lower to the 200 SMA area.

If the neckline and 100 SMA levels hold as support, however, then GBP/NZD could bounce back up to the 2.0100 “shoulder” highs or even hit the top of the pattern near 2.0250.

What do you think? Which way will GBP/NZD go?

Forex Chart Settings:

Slow Stochastic: 14,3,3
100 SMA: Blue line
200 SMA: Red line