Remember that symmetrical triangle formation on the AUDUSD daily chart that I talked about yesterday? Well, it seems like the pair has already broken below the bottom of the triangle, suggesting that the pair could keep falling down. Before it does, it still has another support level to break and that’s the neckline of the head and shoulders formation. If the pair’s downward momentum is strong enough to break the neckline, the pair could slide all the way down to the next support level in sight, which is around the 0.8600 area.
If you’re wondering how the AUDJPY pair is doing, here’s the lowdown: The pair has just broken below the rising trend line drawn connecting the lows of the pair on the 1-hour chart. However, the pair doesn’t seem quite ready to drop down so quickly. It keeps retesting the broken trend line, as though it were attempting to break above it. The stochastics seem to indicate otherwise, considering that it is already in the overbought level and trying to make its way down. If the pair drops down, it could bounce after reaching the previous day low of 80.20. But if it lands back above the rising trend line, it could climb until the previous day high of 81.60.
Now, we have the USDCHF on its 1-hour chart. As you can see, the pair has recently violated its short term uptrend line. Because of this, it could range for awhile between yesterday’s high and low. If buying interest resumes and the resistance at yesterday’s high gets broken, then it’s possible for the pair to reach the psychological 1.0500 mark. On the flip side, the pair would find its next line of support at 1.0300 if the it falls below yesterday’s low.