I’m serving up a couple of short-term pullback plays and a potential countertrend opportunity this week. Check ’em out!
First up is this classic break-and-retest scenario on CAD/JPY’s 1-hour forex chart. Price looks prime for a correction to the Fib levels that coincide with an area of interest visible on this time frame.
A slightly deeper pullback could take the pair down to the 85.00 major psychological mark, which coincides with the 61.8% retracement level. This is also close to the longer-term rising trend line support.
Stochastic is already pulling up from the oversold region to signal a return in bullish pressure, but I’d probably hold out until after the OPEC meeting this week.
Next up is this bullish yen play on Guppy as the pair has been trending lower and is currently testing the descending trend line and area of interest on the 1-hour chart.
Besides, stochastic is making its way out of the oversold region to hint that pound bulls have enough energy to push GBP/JPY past these resistance levels. Think I should switch to a long bias on a break above the 150.00 handle?
Lastly I’m also keeping a lookout for this momentum setup on EUR/NZD’s 4-hour chart since the pair formed a reversal pattern right on the channel resistance.
The pair is in an uptrend, though, so shorting may be a little more tricky and risky. A break below the double top neckline and mid-channel area of interest around 1.7000 could be enough to draw more selling pressure until the channel support at 1.6800.
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