Welcome to a brand spankin’ new trading week!
Whether you’re looking at dollar pairs or if you prefer them yen crosses, I got yo back with hot setups on USD/CAD and EUR/JPY.
Take a look!
If you’ve been watching EUR/JPY for weeks, then you’ll know that the euro has been on a downtrend against the yen since June.The pair is now on its way up after finding support at the 128.00 psychological handle.
Can EUR/JPY still extend its downtrend? I’m not seeing red candlesticks yet but the euro is fast approaching the 100 SMA that’s close to the 50% Fib of August’s downswing AND the trend line support that’s been around for weeks.
Shorting at the first signs of bearish momentum is a good bet especially if you place your stops just above the trend line resistance.
If you’d rather buy the euro against the yen, though, then you’ll definitely want to do it after EUR/JPY breaks above the trend line and stays above the 200 SMA on the chart.
While waiting for candlesticks to confirm EUR/JPY’s direction, you might want to set your sights on USD/CAD’s daily time frame.See, not only has the dollar made a Gravestone doji, but it had done so after a solid green candle and before a potentially red candle.
Are we looking at an Evening Star pattern in the making? Watch today’s candle closely to see if USD/CAD pushes through with the bearish reversal pattern.
Shorting at current prices would make sense if you think that USD/CAD will see enough selling to dip back to at least its trend line support.
Of course, dojis are still indecision candles and could still lead to further buying. If today’s candle closes in the green, then y’all better prepare for a possible continuation of last week’s upswing.