I’ve got a yen special for y’all this week! To be specific, I’ve got my one good eye on these break-and-retest reversal plays. Take a look!
So much for that AUD/JPY trend play I was watching last week! This pair busted right through the top of the descending channel on its 4-hour chart to indicate that a reversal is due.
Price might need to pull back to the broken resistance, though, and the Fib retracement tool shows that this lines up with the 50% level. Stochastic is heading south after reaching overbought levels, which suggests that buyers might be taking a break and letting sellers take over first.
Guppy also previously broke through its descending channel and I got caught in the wrong side of the move the other week. It might be time to switch gears on this pair as it attempts to find more bullish support at the broken channel top.
Applying the handy-dandy Fib tool on the latest swing low and high shows that the 38.2% level is right on the area of interest around the 146.00 major psychological mark. Stochastic is just starting to point down from overbought levels, though, so a larger retracement might be in order.
Last but certainly not least is this neat double bottom reversal pattern forming on the 4-hour chart of NZD/JPY. Price also seems to have breached the neckline at the 74.50-75.00 area, as well as the top of the descending channel, confirming that an uptrend is underway.
Note that the reversal formation spans around 250 pips in height, which suggests that the rally could be of at least the same size. Stochastic is indicating overbought conditions, though, so price might still go for a quick retest of the broken resistance levels before gaining bullish traction.
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