I’m serving up a chart pattern + yen double special in today’s intraday charts update, with a rectangle on EUR/JPY and a triangle on GBP/JPY on the menu. Check ’em out!
Okay, gonna keep it real with y’all. That there 140-pip trading range or rectangle pattern on EUR/JPY’s 1-hour chart ain’t really all that fresh ‘coz we first found it way back on Dec. 6 and then checked up on it again back on Dec. 13.
And back on Dec. 13, the pair was bouncing off the rectangle’s resistance at 129.20, so we were looking to go short, while gunning for the rectangle’s support at 127.80.
Well, the pair did reach 127.80 and support appears to be holding. And since support seems to be holding, today’s play is to trade within the range again by looking for opportunities to go long while gunning for the rectangle’s resistance at 129.20.
But as usual, do keep in mind that the risk for a breakout is always there. So if the pair does move back up and bullish momentum is so strong that the pair clears 29.20, then bulls will likely be shooting for 130.10 next.
Conversely, if support at 127.80 fails to hold, then that likely means that bears are gunning for 126.70 next.
If you’re more of a breakout chartist, or you’re looking for a fresh setup, then check out that there symmetrical triangle on GBP/JPY’s 1-hour forex chart.
As y’all probably know by now, a symmetrical triangle patterns means bulls and bears are fighting it out but neither side has a clear advantage. A topside breakout is therefore just as likely to occur as a downside breakout. And that means that it would be a good idea not to have a directional bias and prepare for both topside and downside breakout scenarios.
Do note, however, that an upside breakout needs to clear both 143.90 and 144.60 before y’all can chillax. Otherwise, the breakout may end up being a nasty fakeout. A downside breakout, meanwhile, needs to smash lower past 141.50, ideally on strong bearish momentum.
In either case, the resulting breakout move will likely have enough momentum for a whopping 300-pip move, based on the height of the forex chart pattern.
Whichever scenario plays out, y’all just make sure to practice proper risk management as always, a’ight?