GBP/USD is on a ten day, possible eleven day winning streak if today holds as another up-day. A streak in of itself is not reason to look for a reversal, but it does show how extended Cable has become. Furthermore, with confluent resistance at hand it may be on the verge of at least taking a break. Depending on how that unfolds, it will determine whether the confluence of the 2014/2018 trend-lines and earlier-year price resistance will act as a longer-term ceiling, or only a reason for price to pause before the trend resumes higher. For now, risk/reward doesn’t appear favorable for new longs, while would-be shorts may be best served waiting for momentum to turn down before becoming aggressively involved.
GBP/USD Daily Chart (steadily heading higher)
AUD/JPY has an interesting set-up on the 4-hr time-frame. It is below a pair of trend-lines/slopes extending higher from April and more recently June. This comes after a rejection last week at the June high. The decline off the monthly high hasn’t been met with any real effort to push it higher despite support, creating a horizontal pattern that suggests the rejection could pick up more steam to the downside. Watch for a close below 74.82 for confirmation of another leg lower.
AUD/JPY 4-hr Chart (watch 74.82)
For all the charts we looked at, check out the video above…
Resources for Forex Traders
Whether you are a new or an experienced trader, DailyFX has several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, and trading guides to help you improve trading performance.
—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at@PaulRobinsonFX