Even with the holiday right around the corner there’s always setups to check out in case volatility spikes, including these two resistance setups on AUD/CAD and USD/JPY!
Last week, I pointed out a potential rally in AUD/CAD based on the retest of the rising ‘lows’ on the daily chart. It looks like that area did draw in the buyers, bringing the pair up from the major psychological level of 0.9000 to the major resistance area around 0.9100. W
With the stochastic indicator signaling potentially overbought short-term conditions (as well as other oscillating indicators seen here at MarketMilk), this pair looks ripe to reverse back to the downside on technical arguments, which tend to be stronger in periods where we will see few economic catalysts up ahead like this holiday season.
On the four hour chart above of USD/JPY, we’ve got another range setup with the market not only testing the major resistance area, but looking like it’s already on its way back lower.
The 109.70 handle seems to have fended off the bulls once again, but it doesn’t look to be a quick turn around lower as the market has consolidated for a few session below the resistance area. We’re now seeing further consolidation into somewhat of a symmetrical triangle around the 109.35 handle, likely due to holiday conditions.
Watch out for a break below the symmetrical triangle for the higher probability setup, but don’t ignore any upside breakout if its based on a fresh, surprise geopolitical or economic surprise. And make sure you practice good risk management decisions no matter which bias you choose to trade in this setup!
Forex Chart Settings:
Slow Stochastic: 14,3,3