I’m seeing a potential countertrend play on EUR/USD, plus a double top pattern on GBP/NZD.
Time to short these pairs soon? Which levels do sellers have their eyes on?
Who’s up for a countertrend play?
Now this could be a risky one, so make sure you set your stops right!EUR/USD is trending higher inside an ascending channel on the 4-hour chart, and price is closing in on the resistance around the 1.1400 mark.
Sellers might be ready to jump in right there since Stochastic is already reflecting exhaustion among buyers. If the ceiling holds, the pair could slide back to the nearby support zones at the channel bottom or mid-channel area of interest.
Just be mindful that the 100 SMA is above the 200 SMA to indicate that the uptrend is more likely to resume than to reverse. Heck, this might even mean that there’s a chance the channel top could break!
GBP/NZD made a couple of failed attempts to break above the 1.7300 handle, creating a double top pattern on its 4-hour chart.Pound bears are probably waiting for a break below the neckline around 1.7100 to confirm that a selloff is underway. Better be ready for a drop that’s the same height as the chart pattern if that happens!
Technical indicators are giving mixed signals, though. Stochastic is turning lower again to reflect selling pressure, but the 100 SMA is safely above the 200 SMA to hint that the uptrend could carry on.
If buyers step up soon, GBP/NZD could bounce right back up to the tops or higher. In any case, keep your eyes peeled for either reversal or breakout candlesticks at the neckline!