Bounce or break? GBP/AUD is currently testing the bottom of the descending triangle chart pattern on its 1-hour forex time frame. Support near the 1.9600 major psychological level seems to be holding for now, but stochastic is almost in the overbought area. This indicates that buyers might need to take a break and that sellers could take over, which means that a downside break from support is possible. If that happens, GBP/AUD could fall by around 400 pips, which is around the same height as the triangle pattern. On the other hand, if a bounce takes place, price could climb to the top of the triangle near 1.9800.
Here’s another triangle pattern you might be interested in! AUD/CAD is moving in tight consolidation on its 1-hour forex chart and is approaching the peak of its symmetrical triangle formation. This means that a breakout is bound to take place sooner or later so the question is: Which way will this pair go? Stochastic is on middle ground and barely offering any clear clues at the moment, although the indicator seems to be pointing down and favoring a downside break. Whichever way AUD/CAD goes, the resulting move might last by around 600 pips, which is roughly the same size as the formation.
Last but definitely not least is this neat rising wedge forming on GBP/CHF’s 1-hour forex chart. Price is currently finding resistance at the top of the formation around the 1.4800 major psychological level and may be due for a move lower, as stochastic is moving down from the overbought zone. This could lead to a test of support around 1.4750 or perhaps a strong downside break and a potential 300-pip drop, which is approximately the same size as the wedge pattern. Similarly, an upside break past 1.4800 might result to around 300 pips in gains for GBP/CHF as well.
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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.