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A quick update on yesterday’s GBPAUD analysis. The pair had formed a bearish tailed / bearish engulfing bar below support turned resistance. There was also confluence with the 10 and 20 EMA acting as dynamic resistance.
Today the market fell 180 pips and continues to look weak. From here the next key support comes in at 1.74. Any rally into the 1.77 area is likely to be met with selling pressure.
Summary: The initial play here was yesterday’s bearish-tailed bar. However we can also watch for bearish price action on the 4 hour chart should the market retest the 1.77 area as new resistance.
The NZDJPY chart has a lot going on at the moment. We have a potential double top from the March and July highs along with what appears to be a bearish flag forming below the 87.40 key level.
As long as this market stays below 87.40 we may have a couple setups to trade in the coming weeks. First I’ll be looking for a break of flag support, which could present an opportunity to go short.
The second setup will only come if the market confirms the double top. In order to do that we would need a daily close below 85.85. That, of course, will take several days from current levels if it happens at all.
Summary: Look for a break of flag support and then watch for bearish price action on the 4 hour chart. If the market is able to close back above 87.40 all potential short setups are off the table.
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