As I always say, one of the more conservative ways to play an ascending channel is to look for opportunities to go long near the channel’s support area. And lucky us since that’s where price is currently at, so y’all better start looking. Stochastic is also indicating oversold conditions, which is rather promising, but it is kinda worrying that the moving averages are now in downtrend mode. It even seems like the 100 SMA is acting as dynamic resistance, so do be careful. And as usual, just make sure to practice proper risk management should you find a trade based on this or any of the other charts, okay?
After surging higher, EUR/AUD began trading sideways for a while when it reached the 1.4930 handle, forming a bullish pennant or flag in the process. Price finally validated the chart pattern and broke to the upside just a couple of hours ago. And the breakout may potentially last for around 330 pips, based on the height of the chart pattern, so price still has some ways to go. However, do note that the 1.5150 minor psychological level (dashed line) is a price area with significant market interest, so make sure to keep an eye on how price reacts to that price level when or if it gets there.
Not to keen on jumping aboard a pattern that has already broken. Well, lucky you since a bullish flag is also forming on GBP/AUD’s 1-hour chart. The chart pattern is a whopping 800-pips tall, so an upside breakout may have enough bullish momentum to move for the same amount. Looking at our technical indicators, the moving averages are indicating a healthy uptrend, and it even looks like the 100 SMA may soon act as dynamic support if price continues consolidating. Stochastic is about to reach overbought territory, though, so expect some bears to start coming in order to try and invalidate the bullish pattern.
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To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.