Sup, dawg! Let’s start this week’s intraday charts update where we ended last week. And by that I mean even more chart patterns. And in today’s update, I’ve got a potential channel on AUD/JPY and a triangle in AUD/CHF.
A potential ascending channel is beginning to form on AUD/JPY’s 1-hour chart. I say “potential” because the pair needs to climb higher in order to validate the pattern.
Normally, I’d tell y’all to start lookin’ for opportunities to go long on the pair. However, the chart pattern hasn’t been validated yet, so the more conservative traders out there may wanna sit this one out for now since the chance that the pair will resume trending lower by smashing past 86.30 remains high.
But for the gangsta traders out there, just know that the potential channel’s support will probably hold since the pair appears to have found support at the area of interest at 86.30. Also, them moving averages just recently crossed-over into uptrend mode.
And if support does hold and the pair starts climbing higher, then just make sure to keep an eye on how the pair reacts to 86.90 and 87.50 since bears appear to have positioned themselves there.
And in the off chance that the pattern is invalidated by a downside break past 86.30, then that means that them bears are likely gunning for 85.80 next.
As y’all can see, the pair has been trading somewhat sideways while beginning to taper into a point, giving us that there symmetrical triangle pattern to play with.
A symmetrical triangle may break either to the upside or the downside, so we don’t really have a strong directional bias on the pair. And if a breakout does occur, then the resulting selloff or rally may have enough momentum for a whopping 300-pip run.
For now, however, a downside move seems likely since the recent upswing within the triangle has began to lose momentum and stochastic is signaling overbought conditions and all that to boot. So just keep that in mind if you’re gangsta enough to trade within the triangle.
Anyhow, a downside breakout needs to smash past 0.7550 on strong bearish momentum in order for the breakout to be confirmed. Otherwise, the risk remains high that the breakout may end up being a fakeout.
An upside breakout, meanwhile, needs to clear 0.7720 before you can chillax. Know what I’m sayin?
In any case, just be careful and remember to practice proper risk management as always, a’ight?