For today’s intraday charts update, I’m serving up a yen + channel special, with a couple of descending channels for CHF/JPY and GBP/JPY on the menu. Check ’em out, dawg!
As y’all can see, CHF/JPY has been steadily trending lower while bouncing up and down inside that there descending channel.
And as I always say, one of the more conservative ways to play a descending channel is to look for opportunities to go short near the channel’s resistance area. And lucky us, since that’s where the pair is currently at.
Y’all therefore better start lookin’ for opportunities to go short. And all the more so, given that stochastic is already signaling overbought conditions and all that.
Moreover, the channel’s resistance area happens to line up nicely with the area of interest at at 108.90, which is another technical argument for resistance to form here
There’s always a risk for an upside channel breakout, however. Although the pair needs to clear the 110.00 major psychological level before a breakout is confirmed.
Okay, that there descending channel for GBP/JPY ain’t exactly fresh, since we’ve been playing that chart pattern since April 6. And back then, we was lookin’ to short the pair when it reached the area of interest at 138.90.
Unfortunately, the pair didn’t quite reach 138.90 before it began moving back down again. Oh, well. You don’t win ’em all. Just keepin’ it real, dawg. But if you were gangsta enough to jump in with a short, well, congratulations. You’ve got game!
Anyhow, the pair attempted a downside channel breakout. However, the breakout ended up being a fakeout. The pair then shot back up once it was back inside the channel.
And it just so happens that the pair is now at the 138.90 handle. Moreover, 138.90 happens to be where the channel’s resistance area is at. Also, stochastic is already indicating overbought conditions and all that. Y’all therefore better start lookin’ for opportunities to go short.
However, I have to tell y’all, especially the more conservative traders out there, that there’s also a good chance that the pair may stage an upside channel breakout. After all, bullish momentum seems rather strong. An upside breakout needs to clear 140.50, though, so just keep that in mind. And as always, 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.