Is AUD/CAD ready to break out? The pair has been stuck inside a descending triangle for quite some time now and is currently testing support at the .9650 minor psychological handle. Stochastic is moving out of the oversold zone, hinting that a bounce back to the top might take place. If Aussie bulls are strong enough, they could even push for an upside break past the triangle resistance and more gains for the pair. Take note that the chart pattern is roughly 400 pips in height, which means that the resulting breakout move could be of the same size. Of course a downside break is still a possibility, too!
It looks like pound bulls are back in the game! After hitting the rising channel resistance and edging lower, GBP/AUD found support at the mid-channel area of interest on its daily forex chart. This could mean that price might make its way back to the top of the channel above the 2.0000 major psychological resistance, as stochastic is moving up and indicating that buyers are in control. However, if sellers take over, the pair could break below the middle of the channel and head all the way down to the bottom around the 1.9000 handle.
Are my eyes fooling me or is that a complex head and shoulders pattern I’m seeing on EUR/AUD’s daily forex chart? It does have a few extra bumps here and there but I think this reversal pattern looks legit. In fact, price is now testing the pattern’s neckline, still deciding whether to make a bounce or a break. If it does break lower, the pair could be in for close to a 2,000-pip long-term selloff, which is the same height as the chart pattern. On the other hand, if the neckline support holds, price could bounce back up to the nearby resistance at 1.4500. Stochastic is already indicating oversold conditions anyway!
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To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.