Welcome to mid-week trading, forex buddies!
Which setup will you most likely trade?
EUR/GBP is trading just above the .8900 MaPs and is testing its 100 SMA on the 1-hour time frame.If the euro breaks above the SMA, then we can look forward to a possible retest of the .8950 handle that’s hanging around the 200 SMA and a channel resistance that’s been solid since late October.
EUR/GBP still has a few pips to go before reaching the inflection area, though, so y’all still have time to design trading plans if you’re planning on taking this setup.
Think the 100 SMA will hold as resistance instead? You can also short at the first signs of bearish momentum and then target November’s lows with your stops placed just above this week’s highs.
With GBP/JPY bears holding 139.50, I’m smelling a double top in the making!Pound bears can short at current levels and aim for the “neckline” somewhere around 137.50 if they believe that Guppy has enough bearish juice to hit the support and resistance level.
The more aggressive bears can also plan for a possible breakout below the support.
Meanwhile, pound bulls can look forward to GBP/JPY revisiting its November highs if today’s bearish candlesticks and Stochastic’s overbought signal don’t hold.
The upside beyond 140.00 looks limited, though, especially with a symmetrical triangle-like pattern on the daily time frame.