NZD/JPY is having trouble making new highs above the 77.75 area.
And why not? The level lines up with a channel resistance that’s been relevant since mid-April. It also doesn’t help that the 100 SMA has just crossed below the 200 SMA.
The cherry on top of this sweet setup is a small divergence on the 1-hour time frame.
Shorting at the first signs of sustained selling pressure is a good idea if you’re betting on NZD/JPY extending its short-term downtrend.
If you’d rather buy the Kiwi against the yen, though, then you’ll want to do it after the Kiwi pops above the 77.30 area. The 78.00 handle is a good target but you can also aim for April’s highs if you’re confident in the Kiwi’s strength.
Cable looks ready to retest the 1.4200 February highs! As you can see, the pound saw a top and then a reversal around the area back in 2018.
Let’s see if history repeats itself.
Pound bulls can take advantage of the current upswing and buy the currency until we see more bearish candlesticks. Be careful of the big 1.4000 level, though, as it can attract tons of short-term bears.
Meanwhile, the bears can either wait for momentum at a rejection of the 1.4000 handle, or they can start placing some shorts in case GBP/USD retests 1.4200.
The 1.3750 double top “neckline” is a good initial target but you can also shoot for a downside breakout all the way to the 1.3450 major area of interest.
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