Whether you’re into riding trends or catching reversals, I’ve got you covered on today’s set!
Check out these potential plays on USD/JPY and EUR/CAD.
USD/JPY: 1-hour
Reversal alert!
USD/JPY might be done with its selloff, as the pair is completing an inverted head and shoulders on its hourly time frame.
Dollar bulls are still waiting for a break above the neckline around the 132.00 major psychological mark before getting the green light for more gains.
If that happens, USD/JPY might rally by the same height as the chart pattern or roughly 200 pips.
Technical indicators aren’t so convincing, though. The 100 SMA is below the 200 SMA to suggest that there’s a chance the downtrend could resume.
In addition, Stochastic is inching close to the overbought region to signal exhaustion among buyers, so turning lower might attract more selling pressure.
Better keep your eyes peeled for either breakout or reversal candlesticks at the resistance to gauge whether or not a move back to the lows at 130.00 could follow soon.
EUR/CAD: 4-hour
If you’d rather go with the flow, then this trend setup on EUR/CAD’s 4-hour chart might work out for ya!
The pair has formed higher lows connected by an ascending trend line that’s been holding since mid-March, and it looks like another test of support is in the works.
The handy-dandy Fib tool shows that this lines up with the 61.8% retracement level near the 1.4700 major psychological level and the 100 SMA dynamic inflection point, too.
This faster-moving SMA is above the 200 SMA to indicate that the uptrend is more likely to resume than to reverse while Stochastic is hanging out at the oversold zone to suggest that sellers are taking a break.
If buyers take over soon, EUR/CAD could resume the climb to the swing high at 1.4935 and beyond. The 50% Fib might even be enough to hold as a floor since it lines up with a former resistance level.
