AUD/NZD has been trading higher while trapped inside an ascending channel since the start of January. However, price seems to have trouble moving past the price area of interest around the 1.0800 major psychological level, which implies strong seller interest and the possibility of a downside channel breakout. In addition, stochastic is pointing down and moving away from the overbought region, so forex traders who are bearish on the pair may be in control already.
AUD/USD has been trading sideways while respecting the resistance area at the 0.7030 handle and support at the 0.6840 handle, giving us a 190-pip trading range or rectangle to play with. However, price recently found support at the halfway point around the 0.6930 handle. And if we apply the Fibonacci tool, we can see that it also lines up nicely with the 50% retracement level. Furthermore, the moving averages have recently crossed-over into uptrend mode, so the pair may be getting ready for an upside rectangle breakout. But looking at the stochastic oscillator, we can see that it’s currently indicating oversold conditions, so perhaps enough sellers may jump in to keep price within the range and/or push it lower for a test of the support area.
The trading range setup on AUD/JPY’s 1-hour forex chart is pretty similar to the setup on AUD/USD above. The forex price action of the two pairs are also pretty similar. In addition, the moving averages have also crossed-over into uptrend mode while stochastic is indicating overbought conditions. The only difference is that price hasn’t reached the halfway point and price is respecting the 38.2% Fibonacci retracement level rather than the 50% level. Also, the 200 SMA acted as dynamic support for the recent upswing. Anyhow, just make sure to practice proper risk management should you find a trade based on this or any of the other charts, okay?
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