Let’s start this week’s intraday charts update by taking a trip down memory lane. To be more specific, we’ll be checking up on our old setups for GBP/USD and GBP/JPY. And it goes without sayin’ that we’ll be lookin’ for fresh plays as well.
We identified that there ascending channel on GBP/USD’s 1-hour chart way back on May 15. Back then, I noted that there was a chance for a downside breakout. However, I also noted that the pair needs to clear 1.2850 before the breakout is validated.
Well, check that out, dawg. As y’all can see, the pair did clear 1.2850, so we’re now mainly bearish on the pair. And all the more so, given that them moving averages just crossed over into downtrend mode recently.
Anyhow, y’all may wanna start lookin’ for opportunities to go short since the pair has pulled all the way back to the key price area at 1.2850. Moreover, stochastic is already signaling oversold conditions and all that, which may entice bears to jump in soon.
Just note, however, that a break past 1.2930 likely means that them bulls are in control and trying to push the pair back into the channel, so y’all may wanna think about bailing yo short if or when the pair does get there.
If y’all can still recall, we had us a Fibonacci retracement setup back on May 18 because GBP/JPY was making its way towards 144.80. Also, I told y’all that if the pair does start moving back down again, then them bears will likely be gunning for 142.50 next.
Well, check that out, dawg. That’s right! 144.80 did hold as resistance and them bears did gun for 142.50. 230 pips in the bag! Aww, yea! We got bank!
Anyhow, if we connect the most recent peaks and troughs, then we get us a fresh descending channel that y’all can see right there. The pair is presently at the channel’s support area, so more conservative traders may wanna sit this one out for now until the pair moves back up to or just below 144.80.
And for the gangsta traders who are thinkin’ about going long here, just know that there’s a risk that the pair may continue to move lower since stochastic is already signaling overbought conditions and all that. And if the pair does keep moving lower, then bears will likely be shooting for 141.60 next.
In any case, just remember to practice proper risk management, a’ight? Also, do note that a break past 145.90 invalidates the channel and likely means that bulls are in control, so just keep that in mind.
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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.