Channel Patterns, Pullback - Forex Analysis 29/7/11

A channel pattern in the EUR\JPY has did a breakout and did a pullback to the lower trend line, and began a continuation of the downtrend. Price has also created a Bearish Engulfing candlestick pattern which is a strong sell signal. Right now we would enter a short trade with stop loss right above the engulfing candle. Take profit is is the size of the channel itself which is 225 pips in size. That's a great trade with a good risk:reward ratio.

The GBP\JPY also shows signs of going down in a descending channel chart pattern. This pattern is traded simply: we will enter short trades when price hits the upper trendline and bounces back, and long trades in case price breaks the channel upwards and pulls back to the resistance line.

The USD\CHF trend has stopped and now price is ranging between two boundaries: 0.8039 and 0.7990 = a range of 50 pips size. We will enter short trades on the upper trend line and long trades on the lower trend line. We will also enter trades in case price breaks the channel and pulls backs. Short trades will be preferably as this is the general trend of this pair.

Good luck and plenty of pips!