Way back on January 30, we had an ascending channel for AUD/JPY which you can still see on that there chart. And if y’all can still recall, the pair was making its way to the channel’s support area back then. As such, our main play was to go long when the pair tests the channel’s support area. Unfortunately, the pair opted to stage a downside channel breakout instead.
However, I also warned y’all that if a downside breakout does occur, then the pair needs to smash past 85.50 (revised to 85.40 in the current chart) with great momentum. Well, as y’all can see that didn’t happen. In fact, the pair began trading sideways, forming a rectangle pattern in the process. And presently, the pair is at the rectangle’s resistance area at 87.00. So if y’all be planning to trade within the range, then y’all better start lookin’ for opportunities to go short. And all the more so, given that stochastic is already moving away from overbought territory.
Do be careful, though, since the bullish momentum of the recent upswing looks strong. In addition, price has been closing above them moving averages, which implies strong bullish interest. Moreover, the recent upswing has pushed the pair back inside the channel. These all point to a possibility that them bears will try to push the pair even higher. So if you do find an opportunity to go short, you may wanna think about bailing or switching to a long bias if the pair smashes past the most recent peak at 87.50 with great bullish momentum.
A descending channel has apparently formed on CAD/JPY’s 1-hour chart, as y’all can see above. The pair currently appears to be gunning for the channel’s resistance area, which should be just above the area of interest at 87.20. Y’all therefore get ready to start looking for opportunities to go short.
However, the pair already seems to be hesitating. After all, 86.70 has also seen significant market interest recently, as y’all can see on that there chart. Also, stochastic is already pushing away from overbought territory. There’s therefore a chance that the pair may start moving back down without ever reaching the channel’s resistance area. Looking for a shorting opportunity here should only attempted by forex traders who are gangsta enough, though. More conservative forex traders may wanna wait until the pair does the channel’s resistance area and said resistance area holds.
Oh, also note that the pair has been closing above them moving averages, which could mean strong bullish interest. There’s therefore currently a small chance that the pair may attempt an upside breakout. Such a scenario seems unlikely for now, though. But if such a scenario does occur, then the pair needs to clear 88.30 before the breakout is confirmed. In any case, just make sure to practice proper risk management, a’ight?
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To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.