Remember that range resistance that we spotted a couple of days back? Well, you would’ve gotten a hundred pips or so if you had traded the range play!
This time around GBP/USD looks set to revisit the 1.2975 resistance just as the 100 SMA is about to cross below the 200 SMA on the 4-hour time frame. What’s more, stochastic is chillin’ in the overbought territory!
In fact, stochastic AND Williams %R are both saying that Cable is “overbought” on the 4-hour chart:
The pair hasn’t reached the 1.2975 level, though, so y’all still have time to design a trading plan around a potential range play. Shorting at the first signs of bounce would make for a good trade especially if the pound drops back down to its November lows.
If you’d rather buy the pound against the dollar, however, then you can also wait for a clean break above 1.3000 and aim for previous areas of interest near 1.3170 or even the 1.3300 handle.
Watch this one closely, brothas!
Here’s one for the trend traders out there! AUD/CAD is having trouble making new lows below .9000, which is understandable since the major psychological level also lines up with a channel support.
What makes the chart more interesting today is that there might be a bullish divergence as well on the 4-hour time frame.
Think the Aussie is set to gain pips against the Loonie? Not so fast! As you can see, we could also be looking at a descending triangle in the making. It also doesn’t help that MarketMilk is saying that AUD/CAD’s trends are still “bearish” across the board.
Waiting for bullish momentum would make for a better play than entering at market if you’re not sure about AUD/CAD maintaining its uptrend.
If you’d rather trade a downside breakout, then you might want to wait until AUD/CAD closes below .9000 and the channel or triangle support before you short the Aussie like yo momma told you to do it.
Whichever bias you’re trading, make sure you practice your best risk management moves! Wouldn’t want to lose the pips you worked hard for, amirite?
Forex Chart Settings:
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