Both EUR/USD and AUD/JPY have been pulling back from their short-term trends!
Think they’re presenting good risk ratios?
Check out their setups:
EUR/USD: 1-hour
EUR/USD has fallen by a cool 200 pips or so since mid-January but it looks like there were enough euro bulls near the 1.1265 level to push the pair back to the 1.1300 zone.
Will the bears extend EUR/USD’s downtrend at current levels? Or can the bulls find enough friends to push the euro to the 100 SMA and channel resistance?
The odds are on the bears’ side with the 1.1300 psychological resistance and overbought Stochastic signal making it easy to short EUR/USD and target January’s lows.
Don’t ignore the possibility of an upside breakout though!
If we see enough euro buying or dollar selling in the next trading sessions, then EUR/USD could still break above the 100 SMA and descending channel before making its way to areas of interest like 1.1375 or 1.1400.
AUD/JPY: 1-hour
Here’s one for breakout traders in da house!
AUD/JPY has been on a downtrend since the start of the year but the bears really put the pedal to the metal when they dragged the pair below a descending channel support.
Aussie has seen some support since hitting its 80.75 lows but the bulls can’t get momentum above the 81.50 resistance near the 38.2% Fib and broken channel support.
Think this is a break-and-retest play in the making? Aussie bears can short at current levels or the first signs of bearish momentum before targeting January’s lows or the big 80.00 MaPs.
If you’d rather buy the Aussie against the yen, however, then you’ll want to do it after AUD/JPY has traded consistently above the consolidation AND the 100 SMA on the 1-hour time frame.
