EUR/USD and EUR/JPY Generate Double Top Sell Signal
Jason Sen | Apr 26, 2023 04:40AM ET
Daytradeideas cheatsheet:
AUD/USD broke support at the lower end of the channel at 6660/40 for a medium-term sell signal. So we have resistance at 6640/60 to try a short with stop above 6680.
Targets are 6615, 6570 & perhaps as far as 6550.
Forex update - EUR/USD & EUR/JPY Double top sell signal!!
AUD/JPY broke support at 8920/8900 for a short-term sell signal, so we now have resistance at 8970/90. Shorts need stops above 9010.
NZD/JPY shorts at strong resistance at 8300/8320 worked perfectly yesterday with a high for the day exactly here before we collapsed to my targets of 8260, 8220, 8190 for a very quick 100 pip profit.
CAD/JPY dropped 200 pips from strong resistance at 100.30/60, so I hope you have managed to run shorts.
We are hitting the middle of the range for the 5-month channel, so it is worth profit-taking & waiting for the next opportunity. A small bounce from here is certainly possible, but longs need stops below 9765.
USD/JPY up one day, down the next day in the 5-day sideways trend. I will wait for something to happen. We are just drifting at this stage.
EUR/JPY made a new high for the day after beating the October 2022 high of 148.40, so it looked likely the next leg higher in the bull trend had started.
However, the pair swiftly collapsed without any warning & closed below Monday's low to leave a very negative bearish engulfing candle. In fact, this candle has buried buyers over the last 2 days, leaving a huge bull trap. This is all the more important because we have a large double top.
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It is worth trying a short on any bounce today, with stop above 148.70. I would scale in over 2 or 3 prices as it is not easy to know how far a bounce could reach today, but I would suggest we have resistance at 147.25/45.
A break above 147.75 could test 148.10/30.
EUR/USD break above 1.1000 was a buy signal & we hit 1.1066, holding just below the early April high of 1.1075. I should have bet on the double top forming - unfortunately, I did not. But looks likely we have it with yesterday's bearish engulfing candle - which we also have with a double top in EURJPY, so it could be all over for the Euro.
It should be worth trying a short on any bounce to the 1.0990/1.1020 area. Shorts need stops above 1.1080.
A break below strong support at 1.0960/40 (stop below 1.0930) is a sell signal for today, initially targeting 1.0870 & eventually 1.0730.
EUR/CAD is also on a charge as we beat the March high at 1.4937 for a buy signal targeting 1.5080/1.5100. Obviously, the pair must hold above 1.4930, so longs need stops below here.
GBP/USD has established another short-term sideways trend. We are approaching resistance at 1.2525/45. Shorts need stops above 1.2565. A break higher should be a buy signal, although the last 2 times we beat the previous highs, the pair reversed sharply, so be aware!
Look for key support at 1.2380/60. Longs need stops below 1.2340. A break lower is an important sell signal, initially targeting 1.2270, perhaps as far as 1.2190.
GBP/AUD break above 1.8715 was our buy signal - longs need stops below 1.8660.
GBP/CAD break above 1.6855/65 should be a buy signal targeting 1.7000/20. We could try a long at 1.6890/70 again today with stop below 1.6850. (This trade worked yesterday & we are holding longs).
There's a bullish engulfing candle on the AUD/CAD weekly chart last week. A double bottom on the 4-hour chart in mid-April.
50 MA crossing above the 100 MA on the 4-hour chart. So perhaps we are building a recovery after steep losses over the past 3 months.
The best short-term support I can see is at 9035/25. (Seeing a bounce from 9011 as I write, so hopefully, longs will work today). Stop below 9005
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