Sup, dawg! We’ll start this week’s intraday charts update with a stroll down memory lane as we check up on our old setups on GBP/AUD and GBP/JPY. Of course, it goes without sayin’ that we’ll be lookin’ for fresh plays as well.
And back then, the pair was close to the area of interest at 152.50 and we were lookin’ to go short while gunning for 151.50 and then 150.70.
Well, check that out, dawg. That’s right! 152.50 did hold as resistance and the pair then moved lower and took out 151.50 and 150.70. And if you were able to ride that downswing, then give yo self a pat on the bag for bagging a lot of pips. Aww, yeah.
Anyhow, if we take the most recent price action into account, we can see that the pair appears to be moving lower while trapped inside a descending channel.
And as y’all can see, the pair is presently testing the channel’s support area. Today’s play is therefore to wait for the pair to pull back towards the channel’s resistance area, which should be somewhere between 152.00 and 151.50.
If you’re gangsta enough to try a countertrend trade, you may also wanna think about going long here and then shooting for 152.00 and 151.50. Just note that a countertrend trade is extra risky and has a higher chance to fail. Also, y’all may wanna wait until the pair moves higher past 150.70 before going long.
And as always, just keep in mind that there’s always a chance that the pair may stage an upside channel breakout. So just be ready to bail if the pair does that and then clears 152.50.
We found that there slightly descending channel back on April 26. The pair was testing the channel’s resistance area at 1.8470 back then. And we were mainly lookin’ to go short.
And if y’all can also still remember, I told y’all back then that if the pair does move back down, then there’s a good chance that the pair may fail to reach the channel’s support since there’s an area of interest at 1.8280.
Well, if you look at that chart, y’all will see that that’s how price action played out since 1.8470 held as resistance. Moreover, the pair didn’t reach the channel’s support since the area of interest at 1.8280 acted as support.
And if you were able to catch a ride when the pair slumped lower, then congratulations. We’ve got bank, dawg! Aww, yeah!
At any rate, the channel is still intact, so why not play it again?
And the more conservative play is to wait for the pair to pull back to the channel’s resistance area, which should be just above 1.8400, and then start lookin’ for opportunities to go short again.
Of course, there’s also the option to find opportunities to go long at current levels and then gun for 1.8400. However, that’s extra risky and is only recommended for gangsta traders.
Whichever setup you take, just make sure y’all remember to practice proper risk management as always, a’ight?
Also, just keep in mind that there’s always a risk for an upside channel breakout. So just be ready to bail yo shorts (if you have ’em) if the pair takes out 1.8470 on strong bullish momentum.