A falling trend line connecting the pair’s highs and a rising trend line joining its lows… Why, that’s a symmetrical triangle forming on AUD/USD’s 1-hour chart! Will the pair keep bouncing up and down inside the triangle or will we see a breakout soon? From what I learned in the brand new School of Pipsology, the size of the breakout could be approximately the same as the height of the formation. In this case, the triangle is roughly 200 pips tall, which means that if it breaks out to the top, it could find resistance at the 1.0000 handle. On the other hand, if it breaks down to the bottom, it could drop all the way down to the .9600 area. It’s a toss-up, folks! So stay on your toes!
Whoa! Is that a descending triangle that NZD/USD is sporting on the 1-hour chart? Sweet! Once again, it seems like the pair is taking another shot at trading below support around .7440. If there are enough sellers hangin’ around, then we may just see the pair strut its stuff all the way to .7350. You might want to take a step back before you bet your pips on the bears though. With Stochastic indicating upward momentum, buyers may push NZD/USD up to test resistance at the falling trend line and make a break past the .7500 handle!
…And completing our comdoll party is USD/CAD with another symmetrical triangle! As you can see, price on the pair has been making higher lows and lower highs. How long can will the triangle stay intact? A break to the upside will probably result in the retest of resistance (what a tongue twister!) at the 1.0350 level. On the other hand, a move south may end near minor support at around 1.0170. But it might be best to play it safe and wait for a few candlesticks to close outside of the triangle before committing to the bull or bear camp.