Are sellers about to get back in the game for GBP/USD and NZD/CAD? Both pairs are making their way up to short-term resistance levels as you can see on these charts!
NZD/CAD has been pacing back and forth between support at the .9350 minor psychological level and resistance at the .9500 mark. Price is making its way back up to the top of the range for now.
Technical indicators are hinting that Kiwi bears could come out soon as the 100 SMA is below the longer-term 200 SMA while stochastic is turning down from the overbought zone. With that, another test of the range support could be in the cards.
If traders are in the mood to push for a breakout, though, the pair could either rally or sell off by roughly 150 pips or the same height as the chart formation. Now Loonie pairs do have a tendency to chill out in ranges but when they do break out, it could mean that a new range is about to form.
Cable is also approaching a nearby resistance level at the 1.3050 minor psychological mark, which might draw sellers back out. However, this could be a trickier play since the pair is currently trending higher and countertrend setups carry a higher level of risk.
Price has been moving inside an ascending channel since the latter half of April and has just moved past the mid-channel area of interest to reflect a pickup in bullish momentum. Take note, though that the 100 SMA has just crossed below the 200 SMA to suggest that the path of least resistance is to the downside. Talk about mixed signals!
At the same time, stochastic is turning down from the overbought zone, also indicating a pickup in bearish pressure. If you’re gutsy enough to short at the top of the channel, it’d help to wait for additional confirmation from reversal candlesticks.