Sup, dawg! I’m starting the new trading week with a couple of short-term channels on EUR/JPY and AUD/CAD. Check ’em out while they’re still fresh!
EUR/JPY has been trending higher for some time now. And if we connect the most recent peaks and troughs, we can see that an ascending channel has recently formed.
We can also see that the pair is currently at the mid-channel area, but stochastic is already signaling overbought conditions and all that. There’s therefore a chance that the pair may pull back towards the channel’s support area at 131.90.
Of course, that also means that there’s a higher-than-average chance for a downside channel breakout. And a move lower past the 131.00 major psychological level would validate a downside channel break.
However, y’all may wanna keep a close eye on the pair until it also moves lower past the area of interest at 130.10 before switching to a more bearish bias on the pair.
At any rate, y’all just make sure to practice proper risk management as always, a’ight?
That rising wedge is still somewhat intact, so we’re still mainly bearish on the pair. However, if we zoom out a bit, we can see that the pair has also been trending lower inside that there descending channel, which reinforces our bearish bias on the pair.
And presently, the pair appears to be respecting the channel’s resistance at 0.9430. And it just so happens that 0.9430 lines up rather nicely with the 61.8% Fibonacci retracement level. There’s therefore a good chance that the pair may be making its way down sooner or later.
If the pair does move down, then just make sure to keep an eye on how the pair reacts to the area of interest at 0.9360.
But in the off chance that the pair moves higher instead, then y’all may wanna bail yo shorts if the pair clears 0.9490, especially if bullish momentum is strong.