If any y’all are lookin’ for short-term chart patterns, then I just might have your fix since I’m serving up a bullish flag on USD/JPY and a channel on EUR/GBP in today’s intraday charts update.
As y’all can see, EUR/GBP has been trending ever lower recently, forming that there fresh descending channel in the process.
The pair recently pushed away from the channel’s resistance area near the area of interest at 0.8840. And normally, I’d tell y’all to start lookin’ for opportunities to go short.
However, recent price action suggests that bullish interest may be strong at 0.8800. Y’all may therefore wanna wait until the pair moves lower past 0.8800 before going short.
And since bullish interest at 0.8800 appears strong, and since stochastic is about to enter oversold territory, there’s also a risk that the pair may stage an upside channel breakout. And clearing 0.8840 would be the earliest signal that bulls are in control.
The pairs needs to clear 0.8880 before the breakout is validated, though. Until then, the risk remains high that the breakout may end up being a fakeout.
USD/JPY spurted higher but quickly lost momentum when it encountered sellers at 113.70. The pair didn’t pullback and started trading sideways, though, since bulls appear to have entrenched themselves at 113.30. And in the process, what appears to be a bullish flag pattern has formed.
If the flag is validated by a strong upside breakout past 113.70, then just make sure to observe how the pair reacts to 114.20 since sellers will likely be waiting to counter-attack there.
Stochastic is already signaling overbought conditions and all that, though. There’s therefore currently a chance that the flag may get invalidated and the pair will pull back.
If the pair does pull back, then support will likely form somewhere around 113.10, since that would also test that there rising trend line. Also, the 200 SMA will likely act as dynamic support, assuming the pair does pull back.
However, if the pair continues to move lower and takes out 112.70, then all bullish bets are off since that’s a clear sign that bears are in control.
In any case, just remember to practice proper risk management as always, a’ight?