Welcome to Q2, comdoll buddies! I’m looking at a couple of short-term plays on NZD/USD and AUD/USD while watching the big channel breakdown on USD/CAD.
| AUD/USD | USD/CAD | NZD/USD | |
|---|---|---|---|
| Week Open (WO) | 0.7685 | 1.2972 | 0.7326 |
| Previous Week High (PWH) | 0.7712 | 1.3272 | 0.7349 |
| Previous Week Low (PWL) | 0.7562 | 1.2946 | 0.7252 |
| Top Weekly ATR (tWATR) | 0.7744 | 1.3065 | 0.7383 |
| Bottom Weekly ATR (bWATR) | 0.7627 | 1.2879 | 0.7269 |
| Other significant levels | 0.7700, 0.7625 | 1.2900, 1.3200 | 0.7300, 0.7400 |
In case you’re wondering what ATRs are all about and how I computed those figures, make sure you check out my entry explaining my trading strategies. Here are some of the comdoll forex setups I’m looking at this week:
AUD/USD: 1-hour
Aussie bulls ain’t done with their charge as this pair has been moving above a short-term rising trend line visible on the 1-hour time frame.
Price has paused upon reaching the .7700 major psychological level, which means that a pullback opportunity could materialize from here. Applying the Fibs on the latest swing high and low reveals that the 38.2% to 50% levels line up with the trend line support and a former resistance zone.
Stochastic is already pulling up so buyers must be excited to resume the climb, but a correction to the .7600 area or 61.8% Fib might also be a possibility.
USD/CAD: Daily
Yep, that was a bearish flag pattern on last week’s USD/CAD chart alright! It signaled that a continuation was due, and the pair followed through with a convincing break of the long-term channel support.
Stochastic is already dipping into the oversold region but hasn’t turned higher yet, which suggests that there may still be some selling pressure left. But if Loonie bulls need to take it easy, a correction to the broken channel support around the 1.3200 mark could be in the cards.I’ve taken a small long position on this pair a few days back, but I’m now thinking of taking the opposite trade with this technical break. After all, this channel has been holding for more than a year already, so the breakdown could be indicative of a new long-term trend forming.
NZD/USD: 1-hour
Consolidation is the name of the game for NZD/USD for now, with a rising wedge pattern forming on its short-term chart.
The pair is currently testing the wedge resistance while stochastic is moving up, which signals that an upside break could be possible. The chart formation is around 150 pips tall so the resulting rally could be of the same size.
If Kiwi bears regain the upper hand, a move back to the wedge support near the .7300 mark could be seen. Similarly, a break below this area could send the pair down by around 150 pips.
Cheers,
See also: Q1 2017 Trading Performance Review
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