Who’s ready to catch some pips? I hope you are, because USD/JPY’s pennant and AUD/CAD’s range play ain’t gonna wait long before they take off. Check them out!
Remember that range play that we spotted a couple of days back? Well, it looks like the bulls have done their job!
AUD/CAD is now finding resistance around the .9470 handle, which lines up with a range resistance that hasn’t been broken since mid-February. What’s more, stochastic is flashing an overbought signal!
Shorting at the earliest signs of bearish momentum is a good idea if you believe that the Aussie will drop back down to the .9400 mid-range level or even the .9325 range support.
If you’re one of them Aussie bulls, though, then you could also wait for AUD/CAD to make new March highs and bet on a retest of the .9525 or .9600 previous resistance levels.
I spy with my blue, Ray-B-covered eyes a bullish pennant in the making!
USD/JPY is consolidating in a symmetrical triangle, which looks a lot like a bullish pennant when you factor in the pair’s sharp uptrend from earlier this year.
Pennant breakouts tend to be at least as strong as the height of the triangle’s base, which means we’re looking at a 150-pip move if the dollar breaks higher.
You can buy the dollar at the earliest signs of a breakout if you’re confident that we’ll see further gains from USD/JPY. Not sure about more dollar gains? That’s alright, you can also wait for a break-and-retest situation
An upside breakout isn’t a done deal, though! Like most symmetrical triangles, a downside breakout shouldn’t be discounted in this case.
USD/JPY hasn’t shown any signs of breaking out, so y’all still have some time to draft your trading plans. Whichever bias you choose, make sure you execute them with risk management in mind!