Word up, peeps! Let’s kickstart this week’s intraday charts update with a couple of channels on EUR/JPY and USD/JPY. Hmm. I guess that means I’m serving up a channel + yen double special today.
EUR/JPY has been encountering selling pressure for some time now. And if we connect the most recent peaks and troughs on its 1-hour chart, we can see that a fresh descending channel has formed.
Not only that, the pair is just about to test the channel’s resistance area. Y’all may therefore wanna start lookin’ for opportunities to go short on the pair. And all the more so, given that stochastic is already signaling overbought conditions and all that.
Moreover, the channel’s resistance area is just above the area of interest at 130.70, which reinforces the idea that resistance will likely hold and that the pair may be going back down soon.
Also, do note that them moving averages are in downtrend mode and the 200 SMA may even act as dynamic resistance.
Anyhow, just keep in mind that there’s always a risk that the pair may continue moving higher and stage an upside breakout. The pair needs to clear 131.20 first before y’all may wanna think about bailing yo shorts (if any), however.
Like EUR/JPY, USD/JPY has also been tilting to the downside recently while apparently respecting a descending channel. Unlike EUR/JPY, however, USD/JPY is currently near the channel’s support area.
However, stochastic is already signaling overbought conditions and all that. In addition, the pair appears to be hesitating at the area of interest at 105.30.
If 105.30 holds as resistance, then that likely means that the downtrend on USD/JPY is accelerating, which also means that the pair may stage a downside channel breakout.
But if 105.30 fails and the pair moves higher, them that likely means that them bulls are gunning for the channel’s resistance area, which should be somewhere around the 106.50 minor psychological level.
As always, there’s a risk that the channel may get invalidated by a strong upswing, so just be ready to bail yo shorts if the pair clears 107.20.
In any case, just remember to practice proper risk management as always, a’ight?