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Consolidation alert! USD/CAD is locked inside what looks like a symmetrical triangle on the 1-hour time frame.
If you’ve read your School of Pipsology, then you’ll know that a break above or below the pattern could lead to a move that’s as strong as the distance of the triangle’s base.Bulls currently have the advantage as USD/CAD tests the trend line support near the 200 SMA. Not only that, but Stochastic is also flirting with the oversold levels!
Buying as soon as USD/CAD steadies above the 1.2800 major psychological handle is a good play if you’re confident that USD/CAD will break higher to retest the 1.2875 January highs or even the 1.3000 major inflection point.
Meanwhile, the dollar bears can wait for a clear break below the trend line support and the SMAs to trade a possible dip to the 1.2690 or 1.2625 previous support levels.
Aussie bears are having trouble extending AUD/USD’s downswing as the pair hits a mid-channel support on the daily time frame.AUD/USD bulls who believe that the Aussie has seen its intraweek lows can buy at current levels and target January’s highs.
Not too confident about jumping in on the uptrend at current prices? That’s alright, you can also wait for retests of the Fibonacci retracement levels or at least some momentum before you place them buy orders.
But what if AUD/USD is done with its uptrend?
I gotta tell ya, it will be tricky to short the Aussie with so many support levels hanging below the current prices.
If you do end up shorting, though, you should at least make sure to bail at the earliest signs of bullish pressure and to manage your risks like it’s the last trade you’ll ever make.