Happy Friyay, forex geeks! It’s all about comdoll crosses today, as we play around with swing-term opportunities on CAD/JPY and AUD/NZD. Let’s get this bread, yo!
CAD/JPY has just bounced from the 81.50 handle, which isn’t surprising since the area was right where the 200 SMA was on the 4-hour chart. What’s more, it also lined up with a falling channel resistance that has been solid since April!
Shorting at current levels would get you a good reward-to-risk ratio especially if you aim for the previous lows closer to 79.50 and you place your stops just above June’s highs.
If you’re one of them Loonie fans, however, then you might want to wait until CAD/JPY makes a clean break above the 200 SMA and 82.00 handle before you pull the trigger on them buy orders.
Whichever bias you’re trading today, make sure you use wide stops when trading yen pairs like these! Currency crosses tend to see more volatility than their major counterparts, ya know.
Yen trading not your thing? Check out this pattern on AUD/NZD!
After spiking higher in late March, the pair has consolidated in what looks like a bullish wedge on the daily time frame.
I don’t know about y’all, but the School of Pipsology tells me that wedges like these can sometimes break to the upside.
Or not. As you can see, AUD/NZD’s daily chart seems to favor a slow and steady downtrend instead.
Think the Aussie will soon break higher against the Kiwi? Try drawing a falling trend line near the pair’s previous highs to see which levels you should watch out for once AUD/NZD breaks above the wedge.
Remember that a breakout is often as wide as the base of the pattern, so you gotta factor that in when placing your long entries.
If you believe that AUD/NZD will more likely extend its downtrend, then watch the chart for a break below the 100 SMA and wedge support.