Let’s begin the week with my analysis on the cable. After several days of strong runs, the pair finally tripped as UK’s 3Q GDP indicates that the country is still in recession. Investors dumped the pair and the price swiftly breached through the psychological 1.6500 and 1.6400 markers with ease. Presently, the 1.6300 level appears to be keeping the pair afloat. Buyers may now be picking the pair up since conditions are already oversold as suggested by the stochastics. If 1.6300 holds then the pair could rise back up to 1.6400. On the flip side, the pair could possibly fall down to the psychological 1.6200 area if 1.6300 breaks.
Check out that symmetrical triangle I spotted on the USDCAD 1-hour chart! The pair’s 200-pip jump was followed by a sharp dive the next day and, right now, it seems like the tug-of-war between the buyers and sellers is a close fight. With the price consolidating and with the stochastics on middle ground, the breakout could go either way. If the pair breaks above the top of the triangle, it could climb all the way up and encounter resistance at the psychologically significant 1.0600 mark. On the other hand, if it breaks below the bottom of the triangle, it could tumble down and find support at the previous day low of 1.0450.
Lastly, let’s take a look at the AUDUSD pair. A head and shoulders formation can be spotted in the pair’s 1-hour chart. The formation’s neckline lies around the psychological 0.9200 number. If the pair closes below that level, it could fall to 0.9100 which is the target price by projecting the height of the formation from the point of breakdown. But if buying interests continue to persist, the pair could rise again possibly back to the 0.9300 handle.