I’ve got a yen special for y’all this week! And it’s a good mix of retracement, range, and breakout plays that you wouldn’t want to miss.
First up is this huge range visible on the 4-hour time frame of EUR/JPY. Price is on its way to the very top, so a short-term long position to catch the momentum might still be a viable play.
If you’re aiming for a better return-on-risk ratio, though, you could be better off waiting for an actual bounce off the resistance and aiming for support. Stochastic is already indicating overbought conditions after all, which suggests that buyers are feeling exhausted by now.
Just keep in mind that a move past the top of the range could signal that bulls are ready to push this pair further north, possibly by the same height as the rectangle formation.
If breakout trades are your thang, then you might like this symmetrical triangle pattern on the 4-hour chart of CAD/JPY better. Price is testing the resistance and might be due for a break higher if Loonie bulls ain’t done.
However, stochastic is hovering around the overbought region to signal that buyers could use a break from here. In that case, the pair could still retreat to the bottom around the 84.00 levels or even attempt to break lower.
Either way, the breakout usually lasts by the same size as the chart pattern, which is roughly 500 pips in this case.
Last but certainly not least is this potential pullback situation on Guppy! Price recently formed and confirmed a double bottom reversal pattern, which means that an uptrend could happen from here.
Pound bulls might need a quick pullback to gather more buying energy, though, as the 143.25 area is looking like a near-term barrier. The Fib tool shows that the 38.2% level lines up with the broken neckline and the 142.00 major psychological mark, which might be enough to keep losses at bay.
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