Got my one good eye on a couple of yen pairs and a euro cross this week, waiting for trends to either resume or reverse. Take a look!
Is the trend my friend on EUR/GBP? This pair is making a slow but steady climb inside an ascending channel on the 4-hour time frame and has just bounced off the top.
Price could be due for a pullback to the channel support around the .8750 to .8800 zone as stochastic looks ready to turn lower. If you’re gutsy enough to ride the bearish momentum and go for a short-term countertrend play, you could hop in a break below the mid-channel area of interest.
But if you’d rather go with the flow, a long position on a test of the channel support could be your bet. Just make sure you keep tabs on the top-tier catalysts lined up from the euro zone this week.
Here’s one for the reversal traders out there! A double bottom seems to be forming on the 4-hour time frame of Guppy, indicating that the pair is due for an uptrend.
Price has yet to test the neckline of the formation and break higher, though, before confirming that a reversal is underway. This chart pattern spans 144.00 to 148.00, which suggests that the resulting climb could be of the same size.
However, stochastic has been hovering near overbought levels for quite some time, reflecting exhaustion among pound bulls. In that case, sellers might still hop in to take GBP/JPY back to the bottoms or lower.
Last but certainly not least is this range bounce on the 4-hour time frame of AUD/JPY. The pair seems to have caught enough bullish momentum and has plenty of room to go before reaching the top of the range at 84.00.
Stochastic is approaching overbought territory, however, so sellers could pop back again soon. In that case, the mid-range area of interest around 82.50 could still keep gains in check and push price back to support at 81.00.
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