I’ve got my eye on a couple of pound pairs this week since the BOE Super Thursday is coming up, but these yen setups are looking pretty neat, too. Take a look!
First up is this reversal formation showing up on Guppy’s 4-hour time frame. A head and shoulders pattern can be seen, with price gearing up to test the neckline around the 147.00 handle.
A break below support could take price down by around 800 pips or roughly the same height as the chart formation. However, stochastic is already dipping into oversold territory to signal exhaustion among pound bears, so a bounce could still be due.
If you’re pound bullish, on the other hand, this setup might work better for you. Price is already approaching the very bottom of its ascending channel on the 4-hour time frame and a bounce could take it back to the top or at least halfway through.
Note that the channel bottom also coincides with an area of interest, adding to its strength as a potential floor. The RBNZ decision is also scheduled this week, so it could be a volatile one for this pair.
Last but not least is this other reversal formation on CAD/JPY’s short-term chart. A double top is forming, with the neckline located around the 84.50 minor psychological mark.
A break below this area could send the pair lower by at least 150 pips or the same height as the chart pattern. A bounce, on the other hand, could lead to the creation of another top near the 86.00 handle.
Stochastic is pointing up to show bullish momentum but is also dipping into overbought territory. Just make sure you keep tabs on crude oil and market sentiment if you’re trading this one!
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