Welcome to the final round of 2020!
Get ’em while they’re hot!
USD/CAD just bounced from the 1.290 zone, which lines up with a support level from early November.What makes the bounce more interesting today is that it happened just as USD/CAD is nearing the end of a descending triangle pattern.
Will we see a breakout in the next trading sessions? A retest and then a break below the 1.2950 support could lead to a 300-pip drop for the dollar.
But what if the Greenback bounces above the pattern instead? After all, triangles reflect indecision and that could still lead to an upside breakout.
If USD/CAD jumps through its trend line resistance, then we could be looking at a retest of the 100 or 200 SMAs near the 1.3100 previous area of interest.
Remember that range support setup that we spotted a few days back? Well, it looks like the bulls have finally noticed!EUR/AUD is now about 170 pips from the 1.6125 long-term range support and is headed fast for the 1.6350 mid-range levels.
Feel like you’ve thrown away your shot? Don’t worry, you can still get a pretty sweet reward-to-risk ratio if you buy at current levels, place your stops just below the range support, and then aim for the 1.6550 range resistance.
If you’re not too confident on the euro’s prospects, however, then you can also wait for EUR/AUD to hit key inflection points and then short all the way to the 1.6125 support, or wait for a break below the range and then trade a breakout play instead.
Whichever bias you end up trading, make sure to follow your trading plan like it was yo momma’s gravy recipe!