If y’all can still recall, we had a bearish flag for USD/JPY back on March 16 when the pair was milling about above 112.90. Well, as y’all can see, the pair moved over 200 pips lower since then, so give yo selves a pat on the back! Aww, yea! We got bank, dawg!
Anyhow, if we take the most recent price action into account, we can see that the pair appears to be trapped inside a descending channel. And presently, the pair is close to the channel’s resistance area. Y’all therefore better start looking for opportunities to go short.
Do note, however, that the very major area of interest at 110.80 appears well-defended by them bulls. Y’all may therefore wanna wait for a reversal candlestick pattern or a break past 1110.80 (or both) before goin’ short.
And to the more gangsta traders out there, y’all should also note that stochastic is moving back up again without ever reaching oversold territory. This implies that bullish interest may be strong. There’s therefore a better-than-average chance for an upside channel breakout. Although the pair needs to clear 111.90 first before the breakout is confirmed. And even then, the pair still needs to smash past 112.90 before it climb further.
We’ve also got a channel for GBP/USD. This time, however, we got us an ascending channel, so we’re more bullish on the pair. Anyhow, the pair is currently testing the channel’s support area, as y’all can see. Y’all therefore better start lookin’ for opportunities to go long already. Be extra careful, though, since bears appear well-entrenched at the area of interest at 1.2510, which seems to be acting as resistance.
And while stochastic is already signaling oversold conditions and all that, stochastic also got pushed back down again after just leaving oversold territory. This could mean that bearish interest is strong. As such, downside channel breakout is therefore a very real possibility, so y’all may wanna prepare for such a scenario as well. In any case, just make sure to practice proper risk management, a’ight?
See y’all next week! Peace! I’m out!
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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.