Chart pattern time! I’m serving up a couple of short-term chart patterns in today’s intraday charts update, with a channel on AUD/USD and a triangle on GBP/USD.
That there descending channel in AUD/USD’s 1-hour chart ain’t exactly fresh. And we first identified it back in Tuesday’s intraday charts update.
And back then, the pair just tested the channel’s resistance area at 0.7940 and was moving back down, so we were lookin’ to go short on the pair. Since then, the pair has moved lower for over 80 pips, so congratulations if any of y’all were able to bag some of them pips. Aww, yea!
Anyhow, the pair began trading sideways after that since support at 0.7880 appears to be holding. We’re still bearish on the pair of course, so y’all better start lookin’ for opportunities to go short again. And should the down move resume, then them bears will likely be gunning for 0.7790 next.
Do be extra careful, though, since stochastic is already pointing back up without ever reaching oversold territory, which could mean strong bullish interest. If so, there’s also currently a higher-than-average chance that the pair may move higher and even attempt an upside channel breakout.
If that does happen, then just be ready to bail yo shorts if or when the pair clears 0.7940 on strong bullish momentum, since that would be a sign that them bulls are in control and the upside breakout is for real.
Yo! If you’re a breakout chartist, then huddle up! As y’all can see a descending triangle has recently began to form on GBP/USD’s 1-hour forex chart.
A descending triangle is, as the name implies, a bearish forex chart pattern, so our main directional bias is obviously to the downside.
And should a downside breakout occur, then them bears will likely be gunning for the key areas of interest at 1.2900 and then 1.2810 after that.
If you’re really gangsta, you can even try lookin’ for an opportunity to short within the triangle since stochastic is already signaling overbought conditions and all that. Also the 100 SMA may potentially act as dynamic resistance.
Going short without a breakout is extra risky, though, so the more conservative traders out there may wanna avoid doing that. After all, there’s always a slim chance that the pair may break to the topside instead. And y’all may wanna prepare for that scenario as well, by the way, especially if the pair clears 1.3020.
In any case, just make sure to practice proper risk management, a’ight?