It’s all about the Aussie on today’s canvas, as we tinker around with AUD/JPY’s range support and a head and shoulders pattern on AUD/CAD. Check it!
As you can see, the pair is showing wicked wicks around the 81.00 – 81.25 area, which is right smack at the range support on the daily chart.
With stochastic just leaving oversold territory, you can bet your pips that other bulls are also waiting for a bounce. Buying at current levels could get you a nice reward-to-risk ratio especially if you aim for the range resistance near 84.00.
Before you buy like there’s no tomorrow, though, make sure that what we’re seeing isn’t a break-and-retest scenario. After all, the pair did dip below the range support area and has yet to break above the 81.25 levels.
Watch this one closely, brothas!
I spy with my cool, bedroom eyes a potential head and shoulders situation on AUD/CAD’s 4-hour time frame!
The pair is fast approaching the .9850 area, which is right around the 100 SMA and the high from late May that formed the other shoulder. Will the pair encounter enough resistance at the level?
If the pair does turn back from the area and manages to break below the “neckline” that conveniently lines up with the 200 SMA, then you might want to aim for the previous lows just above .9550.
If the “neckline” ends up being a rising trend line support, though, then you could also place your bullish bets and aim for the previous highs above .9900.
Whichever bias you choose to trade, make sure you practice good risk management in your execution!