Who’s up to trade these classic chart patterns with me?
I’m seeing a potential reversal on USD/JPY and a possible breakout on GBP/AUD.
Don’t miss these big moves!
It looks like this pair might be done with its uptrend!
USD/JPY is completing a head and shoulders pattern on its 4-hour time frame and is closing in on the neckline at the 132.00 handle. A break below this level could confirm that a selloff is due.
How low can the pair go?The reversal chart formation spans 750 pips in height, so the resulting drop could be of the same size.
Just be careful since the oscillator is already approaching the oversold region to reflect exhaustion among sellers. Turning higher would mean that buyers are about to return, so watch out!
Any chance that buyers could defend the floor?Stochastic seems to be showing a possible return in bullish pressure that might be enough to take GBP/AUD back up to the triangle top at 1.7600.
After all, the oscillator is hovering around the oversold region and might be ready to turn back up soon. If you’re bullish on this pair, keep your eyes peeled for reversal candlesticks at the 1.7275-1.7300 support zone before going long.
Just don’t forget that the 100 SMA is still safely below the 200 SMA to indicate that the path of least resistance is to the downside.
If you’re hoping to catch a break lower, check out the average GBP/AUD volatility to help you set your entries. Or better yet, wait for the actual breakdown and aim to short on a retest of the broken support.
Good luck and good trading, fellas!