Here’s a rundown of the currency cross setups I’m watching this week, plus one short play that I’ve already hopped in on!
First up is an update on the Guppy pullback setup I was eyeing last week, with price getting rejected off the channel top and setting its sights back down.
Using the Fib extension tool on this correction shows that price has already fallen to the 38.2% level near the mid-channel area of interest. Stronger bearish pressure could take it down to the swing low at the 61.8% extension or all the way down to the full extension at 131.67.
However, stochastic is pointing up to indicate that buyers are regaining the upper hand and may push for another test of resistance. TBH, I recently jumped in a short position and will be watching this closely during the U.K. top-tier events this week!
Breakout alert! This pair had been consolidating inside a symmetrical triangle formation since November last year and has finally picked a direction.
Price breached the triangle resistance around the 1.9500 mark, likely resulting to a rally that’s the same size as the triangle pattern. Stochastic is already hovering at overbought levels, though, so profit-taking could happen and lead to a retest of the broken resistance.
Last but certainly not least is another triangle setup, this time and ascending one on CAD/JPY. Price is just testing the triangle support near the 84.00 handle and might be due for a bounce to resistance at 86.30.
Stochastic has climbed out of the oversold area and seems due north, so the pair could follow suit. However, if sellers insist on taking over and pushing for a breakdown, the pair could tumble by the same height as the triangle or around 600 pips.
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