Let’s kick this shindig off with another look at that USDCAD chart I posted yesterday. This time, let’s zoom out a little bit. Taking a look at the daily chart, it looks like the recent consolidation is causing a bearish flag to form. Is a breakout in the cards? With recent candlesticks showing spinning tops and a hammer and with stochastics showing oversold conditions, a breakout to the topside looks more likely. If we do see a candle close above the falling trend line, we may see price zoom higher to test former highs at 1.0300. On the other hand, is sellers are stubborn and decide to jump back in, and if today’s candle closes below 1.0000, we could see price dip all the way down to 0.9900.
Next, let’s get our groove on by checking out 4-hour chart of the AUDUSD. After gapping up over the weekend, the AUDUSD took a dip and tested an area of interest around 0.9200 to 0.9225 before heading back north. With bullish divergence having formed and stochastics showing upward momentum, we could see price rise to test the weekly open just below 0.9400. If, however, selling pressure kicks back in, we could see the pair dance all the way down the area of interest before taking a breather at 0.9150.
And of course, no comdoll party is complete without the NZDUSD. Looking at the daily chart, it looks like the bears are in full control of the pair after price found some significant resistance at the top of an ascending channel. With stochastics just coming out of overbought territory and pointing south, the pair would probably continue its downward move until it finds some major support at the bottom of the channel, somewhere around the 0.7000-0.7020 region.