Bears, Breakdown And USD/JPY

After three unsuccessful attempts to go lower currency bears finally gathered enough strength to launch the attack earlier today. Thanks to their action, USD/JPY declined sharply, erasing many days of increases generated by the bulls. How low can the currency pair fall in the coming days?

EUR/USD – Trading in the Triangle

(Click on image to enlarge)

EUR/USD - daily chart

Earlier today, EUR/USD increased above the upper border of the blue consolidation, which increases the probability that we’ll see a test of the nearest resistances: the upper line of the blue triangle and the orange zone based on the 38.3% Fibonacci retracement.

Although today’s price action looks quite encouraging, we continue to believe that as long as there is no breakout above the upper border of the triangle (or a breakdown under the lower line) another bigger move is not likely to be seen and short-lived moves in both directions should not surprise us in the coming days.

Nevertheless, if currency bulls show strength and manage to take the exchange rate above the nearest resistances, we’ll consider opening long positions.

GBP/USD – Double Bottom?

(Click on image to enlarge)

GBP/USD - daily chart

(Click on image to enlarge)

GBP/USD - daily chart

In our last commentary on this currency pair, we wrote that the exchange rate approached this week’s lows and the blue support line (based on the mid-August and late-October lows), which could translate into another upswing in the coming week – especially when we factor in the proximity to and the green support zone marked on the weekly chart below.

(Click on image to enlarge)

GBP/USD - weekly chart

At this point, it is worth noting that this major support area was strong enough to stop the sellers three times in the past, which suggests that as long as there is no successful breakdown below it a bigger move to the downside is not likely to be seen and one more rebound from here should not surprise us.

Nevertheless, in our opinion, a bigger move to the upside will be more likely and reliable if currency bulls manage to take the pair above the upper border of the red declining trend channel marked on the daily chart. If we see such price action, we’ll consider opening long positions.

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